A good friend of mine and I were having a very interesting discussion on the real estate market here in Alaska. His premise is that the recession up here is going to cause such a contraction in prices on multifamily property that pricing is going to drop 15-25% in the next two years. Personally I am a little more optimistic and I would be surprised if prices drop more than 10%. I also just bought a 4 plex because of my optimism and he thinks that was a foolish move and he is waiting until the market hits the bottom before buying. 

Anyway, what is everybody's prediction of our market? How low is it going to go before rebounding?

It shouldn't drop more than 10%. I think most of the house in Alaska are outdated but asking price is still high, maybe that's why the market looks like its dropping. I looked at 52 MFR and I can honestly say 80% were overpriced because they were out-dated. A lot of landlords in Alaska are out of state. As long you keep your 4-plex or SFR nice and clean, they should still sell good

15-25% drops? I don't think so. IF there was going to be any big moves, they'd have already started. Rents are off their all time highs (as vacancy is off it's all time low) - but things have stabilized. Read this: http://labor.alaska.gov/trends/jan18.pdf

If an LNG pipeline is going to get funded and built, anybody holding property today will be extra glad for it in the next few years. 

That all said - I hope you bought right (already at a discount to retail). I didn't do that first time we bought commercial - and I regret it - but you learn as you go sometimes! 

And Youdo Thirakul is correct - so much old stuff out there! But... the cost of building a 4 plex new is like 500k+ land or more in this town... so getting a beat up one for 200-300k plus land is perhaps about right?