Anchorage Home Sales Slow.

Author:CUTLER, DEBBIE
 
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Cautious is the word when it comes to the real estate market in Anchorage for early 2000. Potential buyers are leery to make a commitment for several reasons, according to the experts.

Foremost on many minds is the possible merger between Atlantic Richfield Co. and British Petroleum Amoco. (Downsizing before the potential merger was announced resulted in about 500 BP/Arco jobs lost in the Anchorage area.) Interest rates are also higher than in previous years--above 8 percent--causing some to question if now is the right time to make a 15-year or 30-year loan commitment. And the proposed property mill tax drop from 18 percent to 10 percent, which goes before Anchorage voters in November, may eliminate many municipal jobs, if passed, creating more worries. A shortage of houses on the market, except perhaps those selling in the higher-end range, doesn't help matters.

"For the most part, we think it will be similar to last year's market," said Neal Fried, labor economist with the Department of Labor. "It was a good year in '98. It slowed down last year. Economically, '98 was a good year as well. Growth was almost 5.4 percent. We slowed last year to 2 percent. This year's growth is expected to be fairly similar--1.5 percent to 2 percent, as far as employment growth."

Fried said the big unknown affecting the market is what will happen with the BP/ARCO merger, which has been denied by the Federal Trade Commission and was expected to go before the Federal District Court in San Francisco unless some kind of deal could be made to ensure competition on the North Slope remains.

With Phillips Petroleum Co. recently announcing that it intends to purchase all of Arco's Alaska assets and not eliminate any Arco jobs in the process, some fears are alleviated. Also positive: oil prices are up--more than tripling in a year. And work on Alpine and North-star fields will continue throughout 2000, both sizeable projects.

Building Permits Decrease

Interestingly, there were a lot of multifamily units being built last year, with two major projects developed that will open up a lot of higher-end rental units this year. However, overall the number of building permits dropped from 1998 to 1999.

According to Susan Fison, municipal...

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