Alaska Real Estate Market: Predictions for 2024?

Alaska homes continued to sell at eye-popping prices last month. The median home sale price decreased by 2.2% year-over-year from $355,00 to $347,300 in January. The number of homes sold also decreased by 82 homes to 763.

The number of homes listed on the market increased by 12.1% YoY from 323 to 362 homes, with only 2 months of supply. Does the scarcity of houses make Indiana a seller’s market? Let’s look at the facts.

Knik-Fairview homes sold for a median sale price of $394,000 million in January, up 10.2% year-over-year. Homes in Anchorage sold for a median sale price of $356,500, a 0.97% decrease year-over-year. There were a few markets in Indiana where prices declined year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 21.00% of homes sold above the list price!

• If you are a home buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 7.28% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If you are a home seller: You can lock in Alaska’s high home prices. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Alaska real estate market statistics reflect the national trend of high demand and low supply. Despite the strong housing demand, home sales tanked. The property prices in Alaska have increased regardless.

So, How is the Real Estate Market in Alaska?

Slow-Moving, Home values in Alaska rose by 24.0% in the last 5 years.

But, home sales increased by 12.1% in January 2023 YoY. Maybe due to the mortgage rate climbing to a two-decade high of nearly 8%! And the number of houses for sale in AK was 1,424 in the month, 2.7%, more than in 2023. Alaska’s housing market is bearish.

The decrease in home sales can be attributed to not having enough properties in Free State. The months of supply is 2 months, which makes AK a seller’s market. So, if you want to sell a Alaska property, now is the right time to list it on MLS.

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Alaska Real Estate Market Statistics

• Average Home Prices: The average median home price in Alaska is $347,300, down by 2.2% YoY. In 2024, experts predict the median sale price will increase due to the tight inventory. Currently, the sale-to-list price ratio is at 97.60%, with an increase of 0.2 pt YoY compared to January 2023.
• Home Sales: As per January 2024 data, home sales increased by 12.1% YoY! In January 2024, 362 homes were sold, up from 323 in January 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Palmer pays $1,299, while the one living in Anchorage pays $1,389.
• Median Days on Market: The median days on the market for homes for sale was 36 days, down by 12 days YoY.
• Pending Sales: The number of homes for sale dropped by 2.7% YoY compared to 2023. Currently, there are 1,424 homes for sale in Alaska.
• Months of Supply: The average month of supply is 2 months. AK’s demand can’t be satisfied with the low supply. AK’s house scarcity is worse than the national housing market.

Alaska Housing Market Predictions 2024

Alaskans have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Alaska’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will return. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.35% in November due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across AK YoY, reaching $347K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Construction Sales Will Increase:  12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for buyers in 2024.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on an NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Alaska?

A housing market crash in Alaska is unlikely.

Anchorage, Alaska’s largest city, thriving job market with diverse opportunities across various industries. Alaska serves as a gateway to Alaska’s stunning natural beauty and industries such as Oil, Gas and healthcare.

Alaska surpasses the 27 US States when it comes to economic growth. Its unemployment rate is at 4.4%. Alaska is a major producer of oil, gas, and minerals, which creates many jobs in the mining, logging, and construction industriesAlaska is a friendly state with low taxes, for retirees.

The average cost of living in Alaska is $54,331 which is 5% higher than National Average. The median household income is $73,000. Living in the glaciers to vast forests and wild coastlines Alaska is relatively affordable. So it is unlikely that Alaska’s housing market would crash anytime soon.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Alaska are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in AK was 1,424 in January 2024. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in Alaska.

In January, the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28%, adding more new listings on the market. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Alaska MLS.

The increase in new home listings in Alaska has also brought back home shoppers who were hugging the sidelines. In fact, the recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Alaska houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Alaska will increase. So, whether you are looking for a condo in Palmer or a single-family primary home in Anchorage, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions about Alaska Real Estate Market

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Alaska Real Estate Market