Real Estate Blog

 2023 Midyear Market Update

Quarter 2 is now over and we are rushing into the second half of 2023. It's been an interesting summer so far here in Alaska with tons of rain and one of the cloudiest summers we have ever had. As Alaskans though, we are still getting out to adventure and making it work. That same Alaska Spirit is also being applied to our local housing market.

During covid we saw artificially held down low interest rates, rates none of us have seen in years. Immediately following we saw a steep increase as the markets corrected and now we have seen some market stabilization as we are sitting around the 5.5% to 7% depending on lender, loan type, and individual situation. This has caused two big things to happen. First, it keeps the sellers who don't need to sell in place for a while longer as they second guess their decisions. Those that don't need to sell have been holding out and that's reduced the current inventory on the market as a whole. Second, there have been a lot of buyers who have opted to wait and watch and rent instead. That has led to a shortage of rentals in Anchorage and has stressed and already low supply which has increased rent prices.

Those two combined have led to low housing inventory while the demand for buyers continues to grow as we have more and more moving in town and from out of state. In a recent national report it was found that 25% of homeowners were looking to move out of their current local area to find better prices and get away from massive appreciation in dense metro areas. Alaska has seen an influx of inbound buyers because of that and that has fed some of our high buyer demand. This demand as a whole has kept prices appreciating and presented more of a sellers market instead of the decline that everyone has expected.

We all know that Alaska is a different economy, and we typically don’t fall into the same trends as the lower 48, or at least, not the same trend at the same time. However, based on current market data, Anchorage has only 67% of the sales we saw last year for residential properties, we have also seen 42% less new listings on the market, and all of this has led to an average of 3.5% appreciation for this year over last year. With July already seeing nearly 11% appreciation over last July.

Alaska has always had a highly seasonal real estate market and historically we see a steep increase in supply and demand come Spring time and throughout Summer. However, that's changing with our low inventory and sellers are getting great prices year round now. There is always a way to put a deal together in any market, it is just a matter of understanding what's important, how to structure it, and having a professional who can navigate the ins and outs.

With a specialty in high-end luxury real estate, we’d love to serve you. If there is anything that my team or I can do for you, please don't hesitate to reach out!