As 2023 begins, a closer look should be taken at the current Alaska real estate market trends if you are looking to invest there. These recent trends can tell us what to expect for the coming year, and will indicate whether now is a good time to invest in Alaska real estate.
Moving to Alaska is a goal for many. They want the natural settings and freedom that come with living in the state. However, market realities can affect your ability to achieve this dream. Read on to learn about the current trends in the Alaska housing market.
2023 Alaska Real Estate Market Trends
Slowing Growth
Home prices peaked across most of Alaska around May or June of 2022. It was part of a long run of home values increasing over several quarters. A gradual price decline followed that peak. Some believe this decline is a market correction that will continue during the first quarter of 2023. However, prices are still up by about 9% over this time last year. Most analysts expect prices to increase during 2023, but the increases will not be as pronounced as in recent years.
Lower Demand
Part of the reason for slowing growth is demand slowing down. Looking at Alaska home sales in December 2022, the number is down by almost half from the previous December. However, this could be part of a seasonal trend. Home sales in Alaska usually decline around January and February. The seasonal trend may have come a month early. If you look at median days on the market, it is about the same place as a year ago.
Less Supply
Another factor is the slowing supply. Fewer homes are going on the market. At the time of writing, there are currently over 1,100 homes for sale in Alaska. That is a decrease of over 12% from last year. There were also 205 new listings in December 2022. That is over 35% less than in December 2021. The supply and number of new listings have decreased for about six months. With decreases in supply and demand, the market has some balance.
Mortgage Prices
The rising mortgage rates are another factor shaping the current Alaska housing market. As of this writing, the national rate for a 30-year fixed-rate mortgage is just under 6.5%. While that is much higher than the same time last year, it is a decrease from a few months ago. Rates peaked at over 7% in early November. Most experts believe we have already seen the peak. Many expect the rates to decline this year.
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