With winter in full force, the steadily rising heat of the Alaskan real estate market may come as something of a surprise to the would-be homebuyer. Surprise or not, the reality is that for 2014, the outlook for the Alaskan real estate market is positively rosy. This is particularly true of large cities like Anchorage. Read on to learn how and why Alaska, long renowned for its vast wealth in natural beauty, wildlife and tourism, may just turn out to be one of 2014’s hits for property buyers of all types and interests.
Overall Outlook in 2014
As far as the experts are concerned, the smart money for residential and commercial real estate investors alike is in the metropolitan area of Anchorage. In fact, sources say that Anchorage is poised to reap the largest increase in property sale prices with a twenty percent bump, if the estimates are accurate. What’s more, Alaska stands in sharp contrast to plenty of other places in America. The recorded peak and trough (the housing market high price point vs. the market low price point) of Anchorage in particular and Alaska as a whole hover around two percent, with averages and long-term conditions holding steady. This translates to a stable, safe market for buyers as well as a decent climate for sellers, since such a market inspires a nice supply and demand balance backed by buyer confidence.
Rising Market Confidence
Thanks in large part to a groundswell of confidence, the Alaskan real estate market is expected to enjoy a very healthy and robust 2014. Since much of Alaska is employed in direct or tangential relation to the energy sector (oil, natural gas, and so on), employment is good, as are the wages and salaries being paid out. Combined with the fact that even Hawaii and the Lower 48 are beginning a slow climb upward in terms of employment and economic growth, Alaska itself is seen as something of a sure thing by residents and outsiders alike.
Expected Residential Growth in 2014
While residential growth is the focus here, it is entangled with the commercial sector to such an extent that to talk of one is to mention the other by necessity. With that said, commercial investors will note that mortgage-backed securities, their most popular funding source, are set to double in 2014. Renters and landlords will fare even better, with the rental market projected to increase by at least ten percent, outstripping even the commercial market in the process.
Red Flags for 2014
It would be folly to assume that next year’s real estate market is devoid of risks or pitfalls, whether in Alaska or anywhere else. Indeed, Anchorage (and by extension, the entire state) is expected to feel the pinch of a reduced availability in credit, the looming shadow of another government shutdown and a host of other problems which currently haunt the national economy. In short, Alaska’s real estate market will be healthier than most in 2014, but it is not without its share of burdens.
Simply put, Anchorage, as well as the state of Alaska as a whole, is poised for a very good 2014. Though problems and hurdles exist, they can be negotiated and mitigated.