Comments on: Alaska’s Economy is Immune…Or Is It?

By: Marty Van Diest

Marty Van Diest — Tue, 26 Aug 2008 18:50:04 +0000

Hi Trace,

You commented on a post dated Jan 24, 2008. It is now August 26, 2008.

We have indeed felt the effects of the global downturn. Our tourism market has felt the effects of high energy costs. It is harder for a buyer to get a loan.

Real Estate sales have slowed about 25% over the past year. Sales of higher end homes are indeed hurting. It is still difficult to show that prices of individual homes are falling…but they certainly aren’t rising. I think older, (pre 1990), houses priced over $300K may be the first to show falling prices. But so far you can’t show it with matched pairs.

A matched pair is the very same house, or an identical house that sold in the past and again recently. If you can show the sales price of the house 2 years ago, and show the same house sale today at a lower price, that is proof of a falling value. We can find a few matched pairs that show falling prices, but there are more matched pairs that show steady or a slight increase in prices.

Time will tell…our inventory is continuing to increase which indicates decreased demand.

By: Trace

Trace — Tue, 26 Aug 2008 14:07:54 +0000

Marty,
I have no specific knowledge of the Alaska real estate market, since I have not lived there for many years. This said, I think that your contention that Alaska will not somehow be affected in some ways by the Global Downturn is to be shortsighted.
The housing crisis brings on the subprime crisis which brings on the equity market crisis and… as of this writing, the Chinese equity indices are down 60% in the last 12 months (as of this writing). A global downturn is just that - global - and with incomes shrinking in American households, consumption for things like… expensive oil … could also be expected to contract.
A close friend tells me that real estate is down in Costa Rica (she is a real estate agent there). So China, Costa Rica, but not Alaska?
It may not ever reach the proportions found in California, Michigan, or Nevada, but the effects will be felt.
At city.data.com where you have posted on Anchorage real estate, one can see that the average selling prices of Anchorage homes are already back to 2005 levels. And the ‘fun’ is just beginning.

By: Marty

Marty — Fri, 25 Jan 2008 00:20:21 +0000

Thanks for stopping by…don’t know which town that was??? But we have a lot of interesting names here.

By: Reno Real Estate

Reno Real Estate — Fri, 25 Jan 2008 00:11:31 +0000

“We are in a global economy and things are actually looking better in Alaska than in many places of the country.”

Yes, I was surprised myself when I was talking to some agents in a small city in Alaska.

I forgot the name(it was difficult to pronounce,similar to ‘Sesketwhewan’) but yes, i asked for some reports and the downturn hasn’t been as bad as the rest of the country.

I’m really happy for your state.