House values have remained stable through Alaska's recession — now approaching three years — and might escape the downturn mostly unharmed, according to a new economic report from the state.
A large and rooted senior population, low interest rates and controlled building activity are likely among the reasons for steady prices of single-family homes, the report from the Alaska Department of Labor and Workforce Development said.
So is the fact that some of the job losses in the current recession have been among nonresidents who don't own homes in Alaska, the agency said.
In Alaska's bigger cities, the average home price even went up in recent years.
Despite 2017 being the fifth year in a row in which more people left Alaska than moved in, the population is much more stable than it was during the deeper state recession of the 1980s.
"There's the belief that because of the recession there's going to be an impact on the housing market," said Rob Kreiger, the state labor department economist who authored the report. "It was interesting to see the confirmation that nothing is really happening, and that's broadly speaking."
In the Juneau, Fairbanks North Star, Matanuska-Susitna and Kenai Peninsula boroughs, among others, the average home price went up between 2015 and 2017. The average price also increased in Anchorage, and statewide ticked up from $315,602 to $323,462.
Stable home prices for years just before Alaska's recession and the fact that average prices haven't dropped during this one suggest that "the housing market will weather the downturn relatively unscathed," the report said.
The oil and gas industry, which has a higher rate of nonresident hiring than most others, has lost the most jobs during the downturn.
"This suggests a significant number of people who lost their jobs in Alaska didn't own homes here," the report said, "which wouldn't affect home sales."
Of residents who earned most of their wages in the oil and gas industry in 2015, 84 percent are still in Alaska and still working, the labor department found. Of those, more than 60 percent are still working in oil and gas.
The worst job losses of the recession happened in 2016, and the decline has since slowed.
Most Alaskans who lost their jobs in the current recession were able to find new jobs in-state, the report said.
Alaska's senior population is the largest it has ever been, according to the labor department. That's also a factor for the housing market because that group is less footloose than younger workers are.
There also haven't been signs of overheated residential building activity in Alaska, and "low interest rates have helped keep sales prices steady during the recession despite no real wage growth and lower sales volume," the report said.
In a recent economic forecast, the Anchorage Economic Development Corp. predicted that the recession will likely end by early 2019 for Alaska's largest city.