After months skimming listings in search of her first home, Elizabeth Knapp, a 26-year-old elementary music teacher in Anchorage, stumbled on her house-hunting holy grail one night in February after work.
It appeared in an agent's email: three bedrooms, two bathrooms, garage, all updated, located in the East Anchorage neighborhood near her parents. Most crucial and hard-to-find was the asking price: $285,000.
She called her agent right away and got set up to make an offer the next morning. Six other offers were already waiting. Knapp and her agent decided to go above asking. To increase the chances the sellers would pick her, Knapp wrote a personal letter.
"I told them that I grew up in the neighborhood and am still a frequent visitor," she said.
She said she liked the nearby dog park and the trails, and that her parents lived nearby.
And she did all that before she even set foot in the house.
Such is the housing market in Anchorage and many other parts of Alaska for millennials -- people in their 20s and early 30s -- who are looking to get into their first home at an affordable price. Knapp's offer, the first she'd ever made, was accepted. Her story, agents say, is not typical.
"We are in a sellers' market. We're seeing three and four offers," said Ava Anderson, a realtor with Jack White in Anchorage, speaking about first homes under $300,000 like Knapp's. "The last one I had had, like, nine offers."
Qualifying for a home loan and finding a house in that range that meets the high expectations of young homebuyers has never been harder, according to Anderson. Competition is high and barriers are many, she said. And a number of indicators show that fewer millennials are buying.
Alaska Housing Finance Corp. makes about one in every six home loans in Alaska, the majority of them to first-time homebuyers. Over the last five years, the corporation has seen the total number of loans made increase, but the percentage of millennial applications has decreased from 44 percent in 2010 to 41 percent in 2014, said Derrick Chan, an AHFC planner.
Millennials, who make up about a third of the homebuying population, have higher debt burdens and different ideas about family and what their professional lives might look like, said Susan Fison, an Anchorage-based expert on housing demographics.
"I think a lot more millennials are oriented toward having more flexibility, and renting does give you more flexibility," she said.
There are also strong economic forces at play, she said. Median student loan debt among people under 35 was higher than ever, roughly $17,000 per person in 2013, according to figures from the Federal Reserve. The same figures showed that median net worth for the same group has never been lower, at roughly $10,000. One in three were living at home as recently as 2012, according to a report from the Pew Research Center. A recent state report on Alaska 20-somethings found that between 10 and 16 percent lived at home between 2008 and 2012.
Millennials also tend to delay marriage, Fison said, and married people are more likely to buy houses. A recent report from the Urban Institute showed that more millennials will be unmarried at 40 than any previous generation.
"Once you have children, the rate of home-buying really goes up," she said.
But these days having children can also stop couples from entering the housing market.
"Childcare is just unbelievably expensive," she said. "It's close to a house payment."
Natasha and Stephen Price, ages 31 and 33, illustrate Fison's point exactly.
"When we first got married in 2007, we thought, we're married now and we don't have kids, so we're supposed to follow that perceived American dream and we should buy a house," Natasha said. "We ended up finding a house to rent that was such a ridiculously good price we were afraid to leave."
They kept looking at houses, but they wanted to find something under $300,000 that didn't need much work and was in a part of town where they wanted to live. Every time they came close, there were so many other offers, it seemed impossible, she said. Plus, there was a quality issue.
"The houses in our price range were zero lot lines, and condos with added dues, or not the value we thought was appropriate for the condition," she said.
And then they had their son, Jack. Both of them work, and the cost of childcare only made their low rent look better. They might consider buying once Jack goes to school, she said.
"It's like, why would we buy? We're saving money by not paying a mortgage," she said.
Anderson, the realtor, said that loan requirements have never been more stringent, and more money is necessary to get into houses. Many of her clients have waited longer to buy because they have to save more. Millennial buyers' expectations for property condition are also a common hurdle.
"When I bought my first home, I bought a crap-tacular property and was able to see past the cosmetic issues," she said.
That doesn't happen anymore, she said. Millennial buyers have a hard time seeing what can be. Anderson blames childhoods with lots of electronics and too few toys that allowed them to exercise their imaginations. HGTV, she added, is also not helping.
"Finding a move-in ready, beautiful property is nearly impossible unless you're paying top dollar. And they don't have top dollar," she said.
The average home price in Anchorage, which has the highest percentage of 20-somethings in the state, is close to $350,000. Juneau prices are similar, said Karinne Wiebold, an economist with the Department of Labor and Workforce Development. Mat-Su, Fairbanks and Kenai are closer to $250,000, she said. Comparing wages to home prices, Fairbanks had the most favorable ratio, Wiebold said.
"Fairbanks is kind of a sweet spot," she said.
Danielle Hamilton, 25, and her husband Clay, 27, bought a home in Fairbanks recently. They moved to Fairbanks from Florida for Clay's job as a U.S. Fish and Wildlife Service pilot, she said.
Danielle said the couple found that houses in Alaska were much more expensive than in Florida, where they could buy new construction for $250,000.
"The homes are just different," she said. "People live differently. They don't finish things." The couple put an offer on one house but pulled out when they discovered it needed too many repairs to meet the standards of the lender.
They ended up getting a place 20 minutes out of Fairbanks. It has three bedrooms, two bathrooms, a finished basement and a garage. On seven acres of land.
Unlike a lot of what they looked at, she said, "it's a pretty normal home."
Anderson said the Anchorage market is expected to be flat in the next year, which is good news for homebuyers. Kelli Powers, a realtor and associate broker with Century 21 in Fairbanks, said the outlook there for young buyers seemed positive as well. Interest rates are good, and home prices are too.
"We're hoping these kids will be finally moving out of their parents' houses and buying places," she said.
Julia O'Malley is an independent journalist who lives in Anchorage. She writes about Alaska people, culture, politics, family and food at juliaomalley.media.
This story appeared in the March 2015 issue of 61º North Magazine. Contact 61º editor Jamie Gonzales at jgonzales@alaskadispatch.com.