Alaska housing market relatively strong: compared to Lower 48, Alaska is holding its own.

• Author: Barbour, Tracy
• Position: REAL ESTATE

Despite the national economic woes, Alaska's residential real estate market remains reasonably stable, and Alaska homebuyers remain confident in the market.

Residential real estate experts indicate that Alaska's housing market is leveling off and, overall, is healthy. Alaska's mortgage-loan delinquencies and foreclosures are increasing; however, they're dramatically lower than those of most other states. Real estate prices remain stable, with only a miniscule drop in the average sales price of residential property. There's a good supply of homes available for sale, creating a balanced market, but residential construction is slowing statewide.

The housing market has a significant impact on Alaska's cost of living and labor force. Housing costs consume 30 percent to 50 percent of the income of many families, according to the Alaska Department of Labor. Housing also impacts the state's ability to attract and retain skilled and professional workers. And when members of the work force leave Alaska, they often pinpoint the lack of affordable housing as the primary reason.

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The rise in foreclosures aside, the Alaska housing market is in an enviable position, according to Caroline Schultz, an economist with the Alaska Department of Labor, Research and Analysis Section. Schultz, who specializes in housing market research, said Alaska didn't have the same kind of speculative-buying frenzy that characterized the Lower 48 boom.

"I think we are lucky to have escaped a lot of the trouble," she said. "I think we're leveling. What we're experiencing is a soft landing from the national housing bubble and the big boom we had a couple of years ago."

Alaska has a diverse economy that moves on its own path, Schultz said. This, in part, has enabled it to evade many of the housing problems plaguing other parts of the country. Other places in the country also have a healthy housing market like Alaska. For example, the Pacific Northwest, Washington and Oregon also are experiencing relatively lower loan-default rates.

NATIONAL HOUSING MARKET ACTIVITY

The national housing market is down--even with the decline of mortgage interest rates to nearly 50-year lows. Dealing with a correction in an overpriced housing market, many parts of the country are seeing tumbling home values, slumping home sales and rampant foreclosures.

According to the latest quarterly survey of the National Association of Realtors (NAR), four out of five metropolitan areas recorded lower home prices in the third quarter from a year earlier, while existing-home sales fell in 32 states from the second quarter.

In the third quarter, 28 out of 152 metropolitan statistical areas showed increases in existing single-family, median-home prices from the same quarter in 2007; four were unchanged and 120 metros experienced declines. (NAR's track of metro area home prices dates back to 1979.)

Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 5.04 million units in the third quarter. That's up 2.6 percent from 4.91 million units in the second quarter, but 7.7 percent below the 5.46 million-unit pace in the third quarter of 2007.

The largest sales gain during the third quarter was in Arizona, up 28.3 percent from the second quarter, followed by California, which rose 28.1 percent and Nevada, up 26.2 percent.

Regionally, for third quarter 2008, the survey also indicated the following about home sales and prices:

* Existing-home sales in the West rose 13.1 percent in the third quarter to an annual rate of 1.15 million and are 12.4 percent above a year ago. And the median existing single-family home price in the West...