Anchorage Alaska RE Economy
Real Estate Broker · Anchorage, AK · Member since 2015 · 170 posts · 46 votes
I just wanted to open up this discussion and see how everyone feels in the Anchorage, AK community of Real Estate here on BP.
It seems to me that a lot of people in the lower 48 feel a shift coming in the RE economy. Prices are reaching an all time high in Anchorage, sort of reminiscent of the '06 era.
I have my own thoughts as to how the economy will be shifting, but what do you guys and gals think?
@Vincent Calderone Welcome to BP! This is an awesome community for like minded individuals.
I always tell new to investing clients that the right time to buy for you is the right time to buy. No one can time the market...almost no one. Typically, if everything is saying the same thing, the market doesn't tend to shift that way.
That said, I might not go new construction in the valley right now, but might go on the fixer upper side of things. This leaves some value-add investing for you, and wiggle room on rents and equity so you're not strapped if the economy does take a turn. The best thing you can do is prepare yourself for the worst case scenario.
I believe Anchorage is at the top of a curve right now (at least in the multi market, the only segment I profess to have any expertise in). That said, there are always deals, no matter the market. Just know the numbers and your criteria, and get your advise from the right sources. If someone tells me: "this is a great deal, you can rent these apartments for X" and the numbers seem inflated (or more commonly, 12 month old) my first question is: "Really? How many units do you own/manage?" followed by: "What percentage do you calculate for expenses?" This will usually separate the wheat from the chaff quickly.
As for the future, I think it's any ones guess. I do believe that at the prices multi's have gone for in the last 18 months there will be some foreclosures. Unless a lot of investors went out and put 40% down, the numbers just don't make sense.
@Sandra Gibson, I remember it well. I was one of them! The main difference I see between then and now is that in the early '80's Anchorage built something like 10,000 new housing units and we haven't done that in the last 15 years! In fact all the studies I've seen say we're short like 300 units per year and have been for a long time.
So....... some conflicting information out there. Any other perspectives???
P.S. I meant to write "good" stuff in an earlier post, not "god" stuff, apologies all around.
When BP and Arco merged in 1999 it affected the whole states tourist industry. I worked for a distributer that almost went out of business.
The problem that I see is wages are stagnant and housing, taxes, food, insurance, medical keep going up. If and when there is another down turn too many households are paycheck to paycheck. Where are the jobs other than the state and government? Is Anchorage relying on the tourist industry?
I wondered about the economy. I can't remember where But I heard Anchorage is a 3 legged stool, Oil, Military, and Tourism (if I'm not mistaken). Oil is currently hurting (as in Houston), military at be facing cuts, and if the economy swings, then ancillary spending will be cut thus fewer vacations.
Moving to AK in Nov. I definitely have my wheels spinning on whether to buy, or wait, and if I wait, for how long.
Where's that magic 8 ball?!?
I wondered about the economy. I can't remember where But I heard Anchorage is a 3 legged stool, Oil, Military, and Tourism (if I'm not mistaken). Oil is currently hurting (as in Houston), military at be facing cuts, and if the economy swings, then ancillary spending will be cut thus fewer vacations.
Moving to AK in Nov. I definitely have my wheels spinning on whether to buy, or wait, and if I wait, for how long.
Where's that magic 8 ball?!?
I think you will be shocked on the price difference between Houston and Anchorage. I was renting a studio all electric with open parking for $800 in 1999. Then I moved to Dallas and you could buy a brand new house for that. I made the same amount of money in Anchorage as I did in Dallas. Wow….I had no idea. I should left there sooner.
I think it's hard to time any market. The people saying, "I told you so," when the stock market tanks are the same analysts who are saying, "Buy, buy, buy!" the week prior.
As it stands, the economy is based heavily off of tourism, oil and military. As I said before, I think Anchorage, specifically, is a very unique market. We have some definite survivability.
Personally, I will continue to buy as long as it is the right deal. Same should be true for any savvy investor in any market.
we should continue this thread as now that it is farther in the year and there has been lots more lay offs in the oil field. I have not been hearing anything good lately for Alaska RE market. Does everyone still think it will be ok?
My own personal opinion is that Alaskas economy is going to be hit hard for the next few years. Things will be tough until oil prices rise. I worked in Alaskas oil and gas industry for 14 years and just recently quit to change jobs and a different lifestyle. All the news I hear is more lay offs are coming. As an investor, it might be the opportunity to get some good deals on property in the next few years.
My own personal opinion is that Alaskas economy is going to be hit hard for the next few years. Things will be tough until oil prices rise. I worked in Alaskas oil and gas industry for 14 years and just recently quit to change jobs and a different lifestyle. All the news I hear is more lay offs are coming. As an investor, it might be the opportunity to get some good deals on property in the next few years.
do you know anything about the detached four plexes out in your area?
A little bit. I've looked at them and did some research on the ones that Byler built out here. I like the idea.
I'm a rather conservative investor and to buy a new detached 4-plex counting on rents to stay high didn't sit well. I'm more of a bargain shopper! If we do see a large drop in RE value and high numbers of forclosures on the market. I'd be in the market for one. I think they have more appeal to tenants vs. traditional 4-plexes.
@Vincent Calderone Welcome to BP! This is an awesome community for like minded individuals.
I always tell new to investing clients that the right time to buy for you is the right time to buy. No one can time the market...almost no one. Typically, if everything is saying the same thing, the market doesn't tend to shift that way.
That said, I might not go new construction in the valley right now, but might go on the fixer upper side of things. This leaves some value-add investing for you, and wiggle room on rents and equity so you're not strapped if the economy does take a turn. The best thing you can do is prepare yourself for the worst case scenario.
@Vincent Calderone it's all about finding the right deals. Sometimes sellers try to unload their properties for the "potential" of their properties. In my opinion, you only buy something as it is, not what it could be. I think the deals are out there, you just have to look a bit harder. Look at your cap rates and cash flow, if they are good "as-is," it's probably a decent deal. Especially if you can value-add some more cash flow or equity in it.
@Vincent Calderone Welcome to BP! This is an awesome community for like minded individuals.
I always tell new to investing clients that the right time to buy for you is the right time to buy. No one can time the market...almost no one. Typically, if everything is saying the same thing, the market doesn't tend to shift that way.
That said, I might not go new construction in the valley right now, but might go on the fixer upper side of things. This leaves some value-add investing for you, and wiggle room on rents and equity so you're not strapped if the economy does take a turn. The best thing you can do is prepare yourself for the worst case scenario.
@James Cash I’m curious your thoughts about Anchorage now? Do you feel the housing has stabilized in the area? I have been out of state for about 6 years and looking to get a pulse on the market (military). I’m hoping some others from this old thread will jump in as well.
Hey Bryan, not sure if you ended up moving up or not. I think the market currently in Alaska is still very strong.
Funny to see these "I think this" and "I think that" posts from years ago. Goes to show you that people opinions are just that...opinions, and NO ONE knows what's truly going to happen. Listen to your own gut, and invest when the numbers make sense!