A national news headline this week said, "Home prices sink to new lows." Prices in a dozen big metro markets have fallen to their lowest levels since the housing market first crashed in late 2006.
In Alaska, we still don't care how they do it Outside. Alaska's home-sales prices continue to maintain their values more than in much of the rest of country, according to state economists and local real estate experts.
The average sales price of homes rose about 2 percent annually in Anchorage and 1 percent statewide from 2007 to 2010, right through the recession, says state housing economist Caroline Schultz.
That compares to a 9 percent annual rise in Anchorage and 8 percent statewide from 2000 to 2006.
A temporary federal tax credit for home buyers pushed average prices up last year, the experts say.
But apart from that, Anchorage prices have been steady.
Meantime, from February to March, prices fell in 18 of 20 cities nationwide in the Standard & Poor's/Case-Shiller index, The Associated Press reported. Prices dropped 3.7 percent in Minneapolis, 2.4 percent in Chicago, and 2 percent in Detroit. They rose .1 percent in Seattle and 1.1 percent in Washington, D.C.
Anchorage has the highest single family home prices of areas surveyed in Alaska, according to a report in the May issue of the Alaska Department of Labor publication, "Alaska Economic Trends."
The average Anchorage sales price rose from $318,000 in 2009 to $328,000 in 2010, with the tax credit, the Labor Department report says.
This year so far, the average for an Anchorage house has dropped back down to around the levels of '07, '08, '09, with an Anchorage average sales price of $316,000, said Niel Thomas of Coldwell Banker Fortune real estate.
"We didn't have the hyper inflation, and we didn't have the big drop," said Thomas. "Housing values are basically flat, nothing like what is going on in the Lower 48."
It almost feels like the situation Outside is a drag on the market here, he said.
Connie Yoshimura, residential land developer and associate broker with Prudential Real Estate, agrees we're better off. "Historically, we're still so much ahead of many, many markets," she said.
Some types of houses are more marketable in Anchorage than others, Thomas and Yoshimura say.
Housing costs, including rents, are the biggest factor in the cost of living, says the May state Labor Department report. The average consumer spends the largest share of her money on a place to live.
With a slow rise in the real estate market, overall inflation in Anchorage last year was only 1.8 percent, even while gasoline costs soared by 18.2 percent and medical costs went up 5.7 percent.
Though housing prices have gone up, buying a house is still more affordable than it has been in years past because interest rates -- the cost of borrowing -- are low, said Schultz, with the state Labor Department in Juneau. Last year the average mortgage interest rate was 5 percent.
To compare, in 2006, the average interest rate was about 6.5 percent, she said.
The Labor Department matches up interest rates, and average housing prices and average wages in each city and figures out how many wage earners it takes to buy a house.
The cheapest alternative: It takes 1.11 people who commute to work in Anchorage to buy an average Mat-Su house, which at $240,000, is about $88,000 less expensive than an Anchorage house.
But there are downsides.
"I don't know how people feel about that with the price of gas," said Yoshimura. "And if you put a price on your time."
It takes 1.44 Anchorage workers to buy an Anchorage house; or 1.47 Valley workers to buy a Mat-Su house.
"Mat-Su is interesting because housing costs are low, but average incomes are also low," said Schultz.
Average earnings are higher in Anchorage, she said.
One thing the economists can't measure is the quality of average houses sold in Anchorage, the Valley, or elsewhere.
But quality and age of the houses do matter in sale prices, said Yoshimura.
"The real issue is that we have a very old and aging housing stock," she said. Older houses need roof repairs, furnace repairs, new appliances, she said.
Newer houses are more energy efficient. Kitchens are bigger these days. Granite countertops and hardwood floors are in demand.
So a person trying to sell to a new house in the under-$400,000 range will likely get a higher price and sell more quickly than someone with an older home in the same price range, said Yoshimura.
Reach Rosemary Shinohara at rshinohara@adn.com or 257-4340.
By ROSEMARY SHINOHARA
rshinohara@adn.com