The Wasilla and Palmer real estate market indicators are mostly positive for 2008. Below are some of the positive things going on in the valley which create continued demand for housing.
Retail: Target, Sportsmans Warehouse and many other stores are opening or have recently opened. Retail jobs are not high paying but they do provide jobs for quite a few people.
Prison: Apparently the prison in Palmer is going to be expanded and another one is to be built in Point Mackenzie. These will provide good construction jobs and long term jobs for state employees.
Natural Gas: This is not about a gas line from the North Slope but about local coal bed methane production. Fowler Oil and Gas plans the first well in the spring of 2008. Many sites throughout the valley are being considered. If they tap into profitable gas, this will be a major boost for the local community.
Military: The military bases in Anchorage continue to grow. This means that many of the soldiers and airmen are looking for homes close to the base. Wasilla and Palmer are both less than a one hour commute.
Oil Prices: What can I say…they are through the roof. If oil prices remain high, economic activity in Alaska will continue to be robust.
The Mat-Su Valley is a bedroom community for the entire state. People live here who work in Anchorage, the North Slope oil fields, Gold and Zinc mines throughout the state, and on fishing boats in Bristol Bay and the waters off the Alaska Peninsula. Our local economy is tied directly to Alaska’s economy which is mostly tied to oil.
In the short term, (10–30 years), Alaska will continue to profit from oil and gas. But we must think about what happens when solar energy becomes economically viable? I believe that is inevitable and will happen within 30 years or less. There will be no demand for oil and gas then, we will need to sell something else…or move.
Alaska is really a mini-economy and the Mat-Su Valley is a micro-economy, we are completely overshadowed by the national and global economies. No matter what the bumper stickers say, we really do need to care about how they do it “outside”.
The financial markets are still in a turmoil, and depending on who you listen to, they could get better or a whole lot worse. If the financial markets get a lot worse, we are in for continued tough times because it will be harder to get home mortgages, and business loans.
We have seen about a 20% decline in real estate volume this year that is primarily a result of the financial crisis. People that could get a mortgage last year, cannot this year. That creates a lower demand.
Because we did not see the real estate frenzy that many of the big national markets had, we haven’t been hit as hard as they have during the credit crunch. Many of the big markets in the South West and South East part of the country are reeling from 40–50 percent declines in property values. These things affect us locally as well.
So all our predictions about the local economy are tempered by the fact that we are really along for the global economic ride. It’s a pretty sobering realization that the building materials here in the Mat-Su Valley have to be shipped from all over the world. If there is a major hiccup in China’s economy…we will feel it right here in Wasilla.