Alaska housing market healthy, but cooling: booms could be in Alaska's future due to large-scale mining projects and the gas line.

• Author: Barbour, Tracy
• Position: REAL ESTATE

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Although Alaska's residential real estate market is faring better than other parts of the country, it is showing signs of slowing.

Alaska has a healthier economic foundation to work with than some other states, according to Alaska Department of Labor Economist Neal Fried. That healthier stance is indicated by some of the state's real estate statistics. "We don't have nearly as many foreclosures and sub-prime loans," Fried explained. "We're not immune to what's been happening, but we are less immune than the rest of the country."

The Alaska real estate market did see significant valuation increases, but it started later, Fried said. So the market didn't boom as much nor have an incredible overhang of inventory. "Maybe part of that (the reason) is the experience we had in the '80s, which makes what's happening now seem minor," he said. "Maybe we learned from that experience."

Shawn Patti, president of the Alaska Association of Realtors, expressed similar views about the state's housing market. In general, the national housing market trends haven't held true for Alaska, he said. "Some of our markets have had small corrections, but typically they just slowed down for a while after experiencing rapid appreciation over the past four years," he said. "Other markets have been flourishing like Kodiak."

Alaska simply didn't see a proliferation of bad loans, Patti said. "Most real estate brokerages did everything they could to steer their clients away from shady Outside lenders, and the foreclosure issues we've seen in other parts of the country aren't a big problem here."

Paul is optimistic about the potential impact of large-scale mining projects and a natural gas pipeline. He believes Denali--The Alaska Pipeline could be another boom in Alaska housing development.

"Initially, the existing inventory will get gobbled up, but soon there will be demand for new construction," he said. "Thankfully, the major cities in Alaska all have zoning and planning structures in place to avoid the haphazard boom construction of years gone by."

The type of buyers seeking new construction would likely be longer-term residents looking to "move up" after selling their homes to newcomers, Paul said. Those Alaskans will have an idea what they're looking for and the type of community they plan to move into.

"So I would expect the subdivisions built in the next few years to really be top-rate," he said.

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