Average price of an Anchorage home tops $420K amid ‘scary’ low inventory

Home sales in Anchorage jumped to another record in 2021 and continued at a speedy pace in a tight market, forcing buyers into bidding wars that often pushed costs well above listed prices, market observers said.

Mirroring the national trend of fast-rising home prices during the COVID-19 pandemic, the average price of a single-family home in Anchorage jumped to $421,000 last year, according to the Anchorage Economic Development Corp.

That’s up from the previous record of $394,000 in 2020, according to Bill Popp, head of AEDC, which released the figures Tuesday during the group’s annual economic forecast.

Just over 3,600 single-family homes sold last year, an increase from 2020, when sales topped 3,200 and were the highest in at least 12 years.

A key factor is the limited number of houses on the market, realtors say, as residential construction has slowed in recent years.

The industry built fewer homes than expected last year. Popp said residential construction fell 7% compared to 2020, amid rising costs and shortages of material and labor during the pandemic.

[Supply chain hang-ups are stalling construction projects across Anchorage]

Limited land to build on, a longstanding problem for Anchorage, adds to the problem, realtors say.

‘I make offers when I’m standing in a house’

The housing inventory is extremely low, said Art Clark, Realtor and broker with Real Broker Anchorage. About 100 single-family homes and about 45 condominiums are currently available for sale in the Anchorage area, well below the already low levels at this time last year, he said.

There’s less than one month’s worth of inventory on the market, when it should be five or six months, he said.

“It’s just so drastically low. It’s kind of scary,” Clark said. “As long as it continues to be super low, prices won’t go lower. As soon as something goes on the market, a horde of jackals is waiting around to snap it up.”

Elizabeth Bolling, a political consultant in Anchorage, said she’s been looking for her first home in the city for about 18 months, without success.

She’s offered tens of thousands of dollars above the listed price on homes but has lost out to higher offers.

“I make offers when I’m standing in a house,” she said. “I don’t even go home and think about it. You’re taking a risk just to go view it in the first place. That’s why some people are buying houses unseen.”

Last year houses sold in just 21 days on average, down from 51 days in 2019, Clark said, quoting data from the Alaska Multiple Listing Service, which provides real estate information.

[Anchorage homeowners see jump in property values in 2022 assessments]

Joshua Nelson, president of the Anchorage Board of Realtors, said savings accounts have grown during the pandemic, thanks to federal stimulus checks and other federal support.

And interest rates, which determine borrowing costs for homes, remain historically low, though they’ve been rising.

Concerns about future increases that will boost borrowing costs are adding to the urgency for many buyers, he said.

Potential buyers are routinely offering $30,000 to $50,000 above listed prices, even for midlevel homes, he said.

Nelson said sales prices have continued to rise this year so far.

“We don’t see interest rates going down or prices cooling,” said Nelson, also chief executive of Keller Williams Realty Alaska Group. “It is absolutely, 100% a seller’s market.”