How Job and Population Loss Affected Our Local Housing Market
According to Neal Fried, economist, with the Department of Labor, Anchorage lost an estimated 2,200 jobs in 2017 and he forecasts another 1,000 jobs lost in 2018. The only sector to increase jobs was in health care with a gain of 800 in 2017 and a projected gain of 600 in 2018. Anchorage also had a population loss. According to Fried, there were 4,273 births minus 1,768 deaths, plus a net migration of -3,959 for a population loss of 1,454, making our total population at 297,483, down from a high of 300,880 in 2013. Yet, population and job loss has had little effect on our local housing market.
Last week, Anchorage had 36 newly listed single family homes for sale compared to 45 the year before. Ask any buyer who is looking for a $366,000 averaged priced single family home to buy and you can hear their frustration in finding one in good condition. The same holds true for the move-up buyer wanting a larger than 6,000 square foot lot and preferably on the hillside. That lot is hard to find at a price below $200,000, making new hillside construction a minimum of $750,00 or more if you add a basement. Lack of new construction inventory, which remains at historic lows, has kept our housing market stable, despite buyers’ frustrations over hard to find properties, for example, with garages 24 feet or longer for that F-150 pick-up truck. Many of the move-up homes built in the l990’s, or earlier, have a traditional floor plan with formal living and dining rooms. Contemporary housing designs have changed since 2000 with the great room and open kitchen now the preference for our more casual lifestyles. MLS sales for 2017 was down less than 200 and sales prices remained remarkably stable with only $6,000 off the average sales price. Foreclosures are frequently a bell weather of a deteriorating housing market but according to MLS only 15 foreclosures were listed for sale on January 3rd, 2018. During the real estate recession of l986-88 there were almost four thousand foreclosures available. Any comparison to our mild recession to the debacle of the late l980’s is based on fear and not fact. Even our average apartment vacancy rate at 5.1% is a healthy average.
I’ve been helping buyers and sellers in this market for over thirty years and this January has been unusually active for buyers, many of them move-up and downsizing boomers. It’s as if they have finally said, it’s move now or never and time to remodel. Perhaps, spurred on by mortgage interest rate increases, the incremental increases in the price of oil or the potential of new exploration and discoveries in the oil patch, buyers are motivated to make a move this spring. As Neal Fried said in his presentations to various groups in Anchorage, recessions are typically short with 93% lasting no more than three years so perhaps Anchorage’s turnaround time has come.