Homebuilder Andre Spinelli of Spinell Homes says while the house-building market in Anchorage began heating up last year, "Now it's on fire."
The value of new construction in Anchorage has climbed over last year by about $26 million through August, based on building permits. The city anticipates that by year-end, the value will be up by more than $40 million, to $475 million.
Commercial and residential building are both up, for the second year in a row. The city projects the value of each will rise about 10 percent this year.
For several years prior to 2011, the annual value of new construction in Anchorage had been shrinking, said Sharen Walsh, deputy director of development services for the city. The value dropped from more than $800 million in 2006 to less than half of that by 2010.
But the numbers are turning around.
"The last six months there's been quite an uptick in residential," Walsh said. "From our viewpoint it seems like we're coming out of the recession."
The commercial growth this year seems to reflect the fact that some large projects are under way, such as a Sam's Club warehouse store, an Old Navy store and some smaller shops in the Tikahtnu Commons Shopping Center, and a Walmart in Muldoon, said John MacKinnon, executive director of Associated General Contractors of Alaska.
"I think we're looking at fewer but bigger ticket items," he said.
MacKinnon said Anchorage still has a surplus of office and commercial space.
"It's going to take growth in the overall economy to soak up that surplus," he said.
In contrast, the inventory of new houses to buy in Anchorage "has gotten very low," said Cody Lee, president of the Anchorage Home Builders Association.
The residential growth is in pockets all around the city, from tear-downs of old houses in Spenard, to new houses rising in a former gravel pit in Sand Lake.
Through August, builders had applied for permits for 224 single family houses compared to 188 for the same period last year, and 44 duplexes compared to 24 last year. There were more multi-family units last year, with one big public housing project.
The market today shows there's an unfilled backlog of demand for housing, said real estate broker and developer Connie Yoshimura.
"Even at 10 percent, (growth) the increase is not enough to satisfy demand," Yoshimura said. She said a couple of buyers moving up from out-of-state bought houses sight-unseen, so they'd be ready when they arrived.
"That would indicate to me there's a lack of inventory in the market," she said.
Yoshimura said the biggest need appears to be in houses priced from $300,000 to $500,000.
One problem: Anchorage doesn't have vast chunks of land left for new subdivisions, said Lee, from the Home Builders Association.
Builders this year are filling out subdivisions in two former gravel pits, Lee said: West Park, the former Sand Lake gravel pit west of Sand Lake Road and north of Dimond Boulevard; and The Terraces, in an old pit east of Lake Otis Parkway and south of O'Malley Road.
People are also tearing down old houses in Spenard and elsewhere, to replace them with duplexes or something bigger, Lee said.
Spinelli is building in all of those areas. Duplexes are especially popular, he said. One of his developments is duplexes with two-car garages in an area called Hearthstone, on 80th Avenue east of Lake Otis. They start about $200,000, he said.
He said the company thought it would sell around 97 houses this year, but is ending up with about 30 percent more than that.
Right now, he said, "We're trying to put as many foundations in as we can" before winter.
Though the Alaska housing market chilled during the recession, it was "relatively stable" compared to the rest of the country, says a September article in the state Department of Labor's magazine, "Alaska Economic Trends."
Residential construction in Alaska boomed the first half of the last decade, the article says. "But Alaska's accelerated building pace didn't have the same speculative fervor as many regions in the Lower 48, and it didn't result in the same level of over-building."
"What I think we have now, we have all-time low interest rates, pent-up demand, and finally people are just coming off the fence," Spinelli said.
Reach Rosemary Shinohara at firstname.lastname@example.org or 257-4340.
By ROSEMARY SHINOHARA
Anchorage Daily News