Housing Report: Anchorage Area a Seller’s Market
The Anchorage metropolitan area, which includes the Matanuska-Susitna Borough, has more demand to buy homes than there are homes available for sale, which increased prices in 2020.
Home Prices Up 8 to 9 Percent
The US Department of Housing and Urban Development’s Office of Policy Development and Research spent all of 2021 crunching the numbers and recently published its Housing Market Profile for Anchorage. Each quarter, a dozen metro areas are profiled as part of the US Housing Market Conditions Report.
In its Anchorage area spotlight, the report says, “The home sales market is tight due to a shortage of for-sale housing inventory, and apartment market conditions are balanced.”
For the period of November 2019 to November 2020, prices for new homes were up 9 percent, to an average of $447,200. That increase compares to a 2 percent annual rise in 2015 through 2018, and flat prices for new homes in 2019. For existing homes, prices were up 8 percent for the year, to an average of $339,300.
Sales of both new and existing homes totaled 9,750 for the year, up 6 percent from sales volume a year earlier. New home sales fell 2 percent to 490 compared to a year earlier; 2019 had seen a 7 percent year-over-year increase in sales of newly built homes after three straight years of 9 percent annual declines.
The report counted 750 new homes constructed in Anchorage and the Mat-Su during 2020, down 13 percent from 870 built the year before, which was already down from seven straight years of 13 percent annual increases. The report estimates a 1.7-month supply of homes available for sale, down from a 4.9-month supply in 2019.
The estimated home vacancy rate of 1.4 percent is down from 1.5 percent in 2010, the last time the Housing Market Conditions Report profiled the Anchorage area.
Home loans that were delinquent by ninety days or more rose to 5 percent in 2020, compared to 1.1 percent of delinquent mortgages a year earlier.
By a “balanced” condition for apartment rentals, the report means there were generally no steep rate increases in 2020. The overall rental vacancy rate was 6 percent in 2020. However, for apartments, the vacancy rate was 3.4 percent, down from 4.5 percent in 2019. The higher rate of vacant rental properties is driven by single-family houses, which is where 47 percent of renters live.
During 2020, Anchorage and the Mat-Su had 290 new apartment units built. As with new houses, that appears to be an interruption from the pre-pandemic year of 2019, when 400 new apartment units were added to the area. Apartment construction had surged from 2014 to 2019, with 1,650 units built, compared to 900 units in the five years before.
Still to come, the report notes, is additional development at Coronado Park Senior Village, a 98-unit townhouse complex near downtown Eagle River targeted at occupants aged 55 and older. Designed as a mixed-income neighborhood, studio apartments rent for $663 and two-bedroom units for $847.
The report attributes strong demand for housing despite economic disruptions of the COVID-19 pandemic to the stable employment at Joint Base Elmendorf-Richardson, where 4 percent of the area population works. Approximately 17,400 active duty, reserve, and civilian employees work at the military bases.