Alaska

Ignore the national housing headlines. Alaska is unique.

Through Nikki Giordano

Updated: 44 Some minutes ago Released: 59 Some minutes ago

Aerial, Aerial View, Aerial Views, Aerial Views, Aerials, Downtown, Downtown Anchorage, Homes, Housing, Housing Market

Alaskans aren’t like the residents of the Lower 48. Neither is our housing market. So when you read headlines about national real estate trends, they don’t tell the story of what’s happening in Alaska.

Nationally, economists are forecasting that the US could be headed for a recession in 2023. Fewer people typically buy homes during an economic downturn. Mortgage interest rates have also risen in recent months. Traditionally, these factors cool down the housing market. But Alaska doesn’t follow national trends. Historically, Alaska’s housing and home construction markets are well out of the Lower 48 cycle.

According to the National Association of Home Builders (NAHB), US home construction grew 50% between 1991 and 1998, while in Alaska it grew 221%. In 2014, residential construction in Alaska grew significantly faster than most areas of the country. But between 2018 and 2020, fewer homes were built in Alaska than in most parts of the United States

The lack of new homes is one of the biggest predictors of what to expect in the housing market. Alaska is currently underdeveloped, meaning it has too few homes for its residents. Anchorage has a deficit of 740 homes for sale, as of November 2022 NAHB estimates.

People always need a place to live. A recession won’t change that, which is why experts believe Alaska’s housing market will remain strong. There are other influencing factors. Mortgage rates have risen from recent historic lows, but interest rates are still within normal limits. The Anchorage Assembly recently made changes to the attached dwelling unit regulations.

ADUs add more living space to the same lot. These changes will allow homeowners to add much-needed housing despite a shortage of available land.

Owning a home is a wise investment. Alaskan homeowners enjoy tax benefits, build equity, and belong to a community. Don’t let national market trends dictate your decisions. Alaska’s housing market remains strong and now is a good time to become a homeowner.

Nikki Giordano is the CEO of the Anchorage Home Builders Association. For more than 10 years, Giordano has partnered with industry leaders and championed affordable housing in our community.

The views expressed here are those of the author and are not necessarily endorsed by the Anchorage Daily News, which welcomes a wide range of viewpoints. To submit an article for consideration, send an email commentary(at)adn.com. Send submissions under 200 words to [email protected] or Click here to submit from any web browser. Read our full guidelines for letters and comments here.

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