The past, present, and future of the Anchorage housing market: an inside look at the current housing market in Alaska's most populous city.

• Author: Yoshimura, Connie
• Position: REAL ESTATE

Thirty years ago, interest rates in Anchorage were 10 percent for a thirty-year fixed mortgage. The real estate crash hit Anchorage hard, leaving the city with 14,000 empty homes. According to published reports, Anchorage had 30,000 foreclosures and 44,000 more people left the state than arrived.

Homeowners simply dropped their house keys off at the bank and drove down the Alcan with what few possessions they had in hand. Forty percent of Alaska's banks failed during that time period. Today, that same mortgage has a rate of 4 percent, less than half the cost in 1987. For-sale housing inventory is at historic lows, and it's hard for buyers to find a well-maintained home that's less than twenty years old at Anchorage's average sales price of $363,000.

Today, Alaska's foreclosure rate is one of the lowest in the nation at less than 1 percent. The city's population loss is estimated to be less than 2,000. So for the naysayers in Juneau and the worriers at every coffee shop in Anchorage who believe the sky is falling in on Anchorage's housing market, it's not. Not today, not tomorrow, and not in the near future--primarily because Anchorage has a housing shortage. The more than 2,000 oil industry job losses and the minor population loss have had little impact on the housing market in Anchorage, which is the epicenter for the state's economic activity.

According to Thomas E. Aston, economist in the Seattle HUD Regional Office, for the forecast period July 1, 2015-July 1, 2018, Anchorage needs approximately 1,000 new annual housing units, of which 50 percent should fall within the $300,000 to $500,000 price range. In 2015, Anchorage fulfilled only 75 percent of that projected need. In 2016, Anchorage missed the mark by 75 percent. For the first five months of 2017, only 72 single-family unit building permits and 40 duplex building permits were issued. These numbers are almost identical to the historic low of 2016, so it is very likely Anchorage's housing crisis will continue well into 2018 and beyond.

Lack of Land, Financial Constraints, and Red Tape

Both of Anchorage's two top builders, Hultquist Homes and Spinell Homes, survived the real estate crash of the late 1980s and the milder recession of 2008 and are well-positioned and financed for the future. Even so, through May 2017 Hultquist Homes has only twenty-three single family/duplex units permitted and Spinell has twenty units permitted to build. Aside from Troy Davis, who builds in Eagle...