A plus point in Anchorage’s economy: home sales broke records last year – and at record prices too

Anchorage home sales last year broke price records and reached their highest volume level in more than a decade, real estate data shows – a rare bright spot for the city’s economy during the COVID-19 pandemic.

Accelerated sales came at the same time that the city’s population was declining and many Alaskans were dependent on emergency government aid to survive.

What drove trends in single-family home sales was the extremely low stock of homes on the market and the low interest rates that made the loan more affordable, said Bill Popp, president of Anchorage Economic Development Corp.

An increase in demand also occurred when people started to change the size of their homes, with more families staying home for remote jobs or classes, he said. In addition, retirees wanted to reduce the size of their homes.

“It’s a seller’s market,” said Popp.

More than 3,200 homes sold in Anchorage in 2020, most in at least 12 years and well above the annual average, according to data provided by the incorporation corporation, extracted from the Alaska Multiple Listing Service, which provides real estate information.

Average selling prices for single-family homes reached almost $ 394,000 last year, a historic record, beating the $ 371,000 seen in the past two years, Popp said.

His organization released the figures as part of the development corporation’s annual economic forecast.

Art Clark, a co-owner of Alaska Real Estate Associates, said that some houses are receiving multiple offers and can be sold at a higher price than the order.

Activity continued in November and December, usually a slow period as Alaskans leave the state for vacation trips. But many Alaskans have not traveled because of the pandemic.

“Alaska Airlines’ loss was the real estate market’s gain,” he said.

However, only a certain group of people are buying. Many Alaskans are struggling, and more than 10 percent of the state’s workforce collected unemployment checks during the pandemic.

“The people who buy houses are not necessarily the people who have been hurt by the economy,” said Clark.

There is also a downside for buyers, who don’t have many homes to choose from, he said. Perhaps 300 homes are for sale in Anchorage now, well below the more than 1,000 he has seen a few times during his career, he said. Some customers have been waiting for almost a year to find a home.

Most houses are sold in a month, well below the normal term, he said.

Popp said residential inventories were low last year because many potential sellers kept homes out of the market while the pandemic hit the state and the national economy. People were cautious because of uncertainty about how the pandemic would affect their jobs and future job prospects, he said.

Anchorage home prices have steadily increased since 2011, when the average home sold for $ 322,000, said Popp. Low interest rates during those years helped to drive the long-term trend, he said.

The price increase is because the populations of Alaska and Anchorage have declined in recent years, as more people leave Alaska than here.

The strong housing market is expected to continue this year, Popp said.

He said that builders are increasingly applying to build new homes that help meet demand, which could help put more homes on the market.

“We think there is a lot of pent-up demand that has not been met in the past year,” he said.