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Mat-Su housing, rental markets flourish

Megan Edge
The future site of a shopping center along Knik Goose Bay Road in the Mat-Su Borough. The area has seen tremendous growth in the past few years in housing, commercial and infrastructure development. April 16, 2014
Loren Holmes photo
A half-completed residential development in Palmer is selling as quickly as the units are completed. The Mat-Su Borough has seen tremendous growth in the past few years in housing, commercial and infrastructure development. April 16, 2014
Loren Holmes photo
The Mat-Su Borough has seen tremendous growth in the past few years in housing, commercial and infrastructure development. April 16, 2014
Loren Holmes photo
Land for sale along the Port Mackenzie Rail Extension corridor, a $272 million project that is only half completed. The Mat-Su Borough has seen tremendous growth in the past few years in housing, commercial and infrastructure development. April 16, 2014
Loren Holmes photo
Land for sale at a former gravel pit near Palmer. The Mat-Su Borough has seen tremendous growth in the past few years in housing, commercial and infrastructure development. April 16, 2014
Loren Holmes photo
Mobile homes and other buildings for sale in Palmer. The Mat-Su Borough has seen tremendous growth in the past few years in housing, commercial and infrastructure development. April 16, 2014
Loren Holmes photo

Down Knik Goose Bay Road in the Matanuska Valley is a wide open, muddy pit. Nearby, amid remnants from recently cleared woodlands, stands a red and white sign proclaiming "Shopping Center Coming Soon." In the backdrop of the empty lot are big, modern-looking new homes on subdivided lots of land.

These are only a few of the clear signs of the times in the developing region just north of Anchorage.

In 2006, just about a year before the nation's financial crisis hit and the housing bubble burst, single-family home construction tapered off in the Last Frontier. In the years prior, between 2003 and 2005, about 4,700 new units were built around the state every year. Last year only 2,033 were built -- but 38 percent of those were constructed in the Matanuska Valley.

According to economist Karinne Wiebold, new construction of all residential building types across the state has fallen "considerably" since the mid-2000s, and although there has been a drop in construction, the Matanuska-Susitna Borough area is still dominating the rest of the state.

"In 2005, 1,594 new single-family homes were built in the Mat-Su Borough, and from 2007 to 2013 the annual number fell to between 600 and 800 per year," Wiebold said.

Over the last decade, 22,561 single family homes were built across the state. Between 2003 and 2013, 47 percent of those, or 10,588 homes, were built in the Matanuska Borough.

Market competition

"Although Anchorage has three times the population of Mat-Su, less than half as many single-family homes were built there," said Wiebold. "Mat-Su has large tracts of undeveloped land, while urban Anchorage is more limited to infill sites that restrict growth and increase costs."

Economists claim residential construction is no longer booming as rapidly as before the national crash, but realtors said business is still flourishing and is creating a competitive market for buyers.

"The demand for housing is definitely up," said realtor Marty Van Diest. "(On Monday), I had two different couples put offers on different houses, but each house they wrote an offer on had someone else competing for the house."

He said if a house is actually being sold at market value the owners should have an offer within a couple of weeks. Compared to Anchorage, the prices are low considering the available acreage and overall cheap living costs.

"Anchorage has big problems. There is a shortage of land, so land is expensive. And also, there is a higher demand because most people work in Anchorage, so they are willing to pay more to be closer to work. That's a much higher threshold, which drags the cost up a lot.

He also refers to the Palmer and Wasilla area as a "bedroom community" for other areas of the state. Low housing costs still encourage those employed in Anchorage to commute, but it's also become prime real estate for North Slope and mine workers. Brett Evans is a prime example.

Born and raised in Anchorage, he moved to Wasilla four years ago before buying a three-bedroom home, on an acre of land, with a two-car garage, in the Knik Goose Bay Road area. He said knowing the amount of money his friends and family pay to live in the city, and with his work schedule, living in Wasilla was a better fit -- and the $208,000 price tag on the house was worth it.

"Moneywise it's good," said Evans referring to his house, which was built in 2008. "Cheaper taxes, and I think utilities are cheaper. I don't drive to Anchorage every day, but a lot of people do. And you can get a cheaper, nicer house than what you can get in Anchorage."

A better market for renters

Heidi Meyer moved to Big Lake about a year ago. Six months later, she moved into Wasilla with her fiancé, two pit bulls and a baby on the way. Meyer said they pay $900 a month to rent a house, which includes utilities, and "my only neighbor is a few hundred feet away."

She said she lived in Anchorage her entire life and before packing up her dogs and making the move they the couple was paying $1,100, plus electric, for a two-bedroom apartment in a "huge" apartment complex in Government Hill.

Finding jobs was harder for the couple than when they lived in Anchorage, so for the first few months her fiancé commuted, but eventually the two got settled, and now they rarely take the 44-mile trek back to Anchorage.

"I feel like I'm saving a ton of money and I don't have to deal with Anchorage traffic or the hustle and bustle," Meyer said.

Rent in the Mat-Su Borough is also much cheaper, Wiebold said, because "the market is not as tight. Average adjusted rent (rent with utilities included) in Mat-Su was $1,108 and in Anchorage it was $1,229."

A higher vacancy rate, at 5.1 percent, compared to Anchorage's 3.3 percent, is in part the reason monthly costs are cheaper, said Wiebold. But despite the nearly 2 percent difference, leasing agent Tracy Brewington said she doesn't have a problem finding renters.

"Most of the time when someone moves out, I have someone coming in the same day," said Brewington. Currently she's been leasing newly constructed townhomes off of 49th State Street in Palmer, a neighborhood known as Bella Vista. Some are already inhabited, while 60 more units are expected to be completed by next year.

She said as quickly as they are being completed, people are moving in, while others pre-lease and wait for a new place to call home.

"We are growing," said Brewington. "There is lots of industry coming to the Valley. It just seems to be thriving."

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