However, the state’s housing market appears to holding-up well, according to the latest economic trends report from the Alaska Department of Labor & Workforce Development.
Sales prices for average single-family homes in Alaska gained 2.6% in the year from 2015 to 2016, and at $324,000 the average home cost around 40% more than the US national average.
Sales have been hit though with 11% fewer sold in 2016 than the year before, a total of 6,500 sales.
The report notes that the resilience of prices through the first four quarters of the state recession shows that the housing market is stable despite job losses.
Interest rates have had a positive effect on Alaska’s housing market with mortgage rates helping keep affordability steady in 2015 and 2016, and down from 2013 and 2014. This was despite flat wage growth.
On the rental market, rents have increased slightly to an average $1,238 per month including utilities.
New construction of homes was slower in 2016 with 2,100 new housing units built, a decline of 12.5% compared to 2015. The report says that this level was higher than 2010 and 2012 and the slower pace should help avoid a supply glut.
Another positive for the Alaska’s housing market is that even in recession the number of foreclosures has fallen as low interest rates make refinancing an option for more homeowners.
The state’s foreclosure rate was 0.60% at the end of 2016, far below the national 1.53%.
More market update:
Alaska’s economy is in recession with the slump in oil prices hitting the state hard and some experts predicting conditions could be tough for several years.