Heading toward 1985? (Anchorage, Seward: houses, employment, construction)

[pittsflyer]

Not many people can do alot of carving out of anything with 300k + single family homes. The housing prices in Anchorage are the single issue that you are seeing what you are seeing. People that have mortgages are bured in them and can afford to do little else and those renting are paying exuberant rental rates. Outside of the super rich/really well to do.

That feeling you are refering too is when land is avalible, building is going on and young families can buy a home for 1.4 time their annual income. When the average price of a single family home is 300-500k and the average income is 77k there is a problem.

The people that dont have good jobs here are likely strongly considering leaving as they have to roomate up which is highly undesirable especially if there are significant others and/or kids involved. Those that do have good jobs are either in too deep with an outragious mortgage or wont buy until the market dramaticly corrects. I am noticing small decreases but not the changes that need to happen for me to bite.

Another 2 or so years of crippling along would be nice so people can prepare themselves but my fear is this will drag out for another 5-10 years before the market corrects if ever. Personally if you are making very much less than 100k I dont know why you would even want to stay here, the quality of life you would have to endure while you waited woudl not be worth it in my mind and your save rate would be paltry to be able to exploit a correction if it does come anyways.

Originally Posted by GnomadAK

I was thinking about this the other day, and thought about the aftermath of the 1986 crash.

It took decades to really get the economy back, but what I don't think ever recovered was the exuberance, the feeling that the good times would only get better and would never end, the optimism was electric and palpable and after the crash that feeling just never came back. Alaska was really a special place for those short years of the early 80's and it wasn't even all about the money, it was carving out a big chunk of life from the place and leaving your mark.

The Anchorage I left 2 years ago was starting to have a desperate feel about it, a faded glory and it was not the same place. Likely it never will be. I am blessed to have been there at the time, even if I never really made bank back then.

[GnomadAK]

It's not the cost of housing, as comparitively speaking homes were every bit as expensive then as now.

As for the correction, when it comes, if it is as severe as 1986 it will be shocking how fast the prices fall.

In 1986, you had the federal employment and military as one leg of the tripod that was solid. Now, with a shrinking military and no Uncle Ted to funnel federal money into the state, that leg is a bit wobbly.

I know that I would not have been able to afford a house without that 1986 correction.

[Frostnip]

Originally Posted by pittsflyer

Not many people can do alot of carving out of anything with 300k + single family homes. The housing prices in Anchorage are the single issue that you are seeing what you are seeing. People that have mortgages are bured in them and can afford to do little else and those renting are paying exuberant rental rates. Outside of the super rich/really well to do.

That feeling you are refering too is when land is avalible, building is going on and young families can buy a home for 1.4 time their annual income. When the average price of a single family home is 300-500k and the average income is 77k there is a problem.

The people that dont have good jobs here are likely strongly considering leaving as they have to roomate up which is highly undesirable especially if there are significant others and/or kids involved. Those that do have good jobs are either in too deep with an outragious mortgage or wont buy until the market dramaticly corrects. I am noticing small decreases but not the changes that need to happen for me to bite.

Another 2 or so years of crippling along would be nice so people can prepare themselves but my fear is this will drag out for another 5-10 years before the market corrects if ever. Personally if you are making very much less than 100k I dont know why you would even want to stay here, the quality of life you would have to endure while you waited woudl not be worth it in my mind and your save rate would be paltry to be able to exploit a correction if it does come anyways.

highlife2?

[pittsflyer]

That's where I am too, I guess professional engineer was not a good enough career choice to own a home lol

Originally Posted by GnomadAK

It's not the cost of housing, as comparitively speaking homes were every bit as expensive then as now.

As for the correction, when it comes, if it is as severe as 1986 it will be shocking how fast the prices fall.

In 1986, you had the federal employment and military as one leg of the tripod that was solid. Now, with a shrinking military and no Uncle Ted to funnel federal money into the state, that leg is a bit wobbly.

I know that I would not have been able to afford a house without that 1986 correction.

[mizzile]

Originally Posted by GnomadAK

I was there for that crash, it is actually part of why I stayed, once the crash started it went so fast that really there was no way out of it and we couldn't have sold the place we were in for any amount of money, much less what we owed on it.

The main sign to watch for is the atate of Alaska. If and when the state stops hiring, that's the first sign. When they start laying people off, that's the big one. The economy can absorb the loss of some oil field workers but not mass state workers.


Right now I wouldn't buy green bananas, much less real estate. You are right to wait. Keep some cash handy for yard and moving sales, the bargains will be awesome. I picked up tools that I am still using 30 years later for pennies.

Shhhh

But, really, do you think that given the inflated numbers of state employees, that it's going to be that bad to have layoffs? I really don't understand how state government got so bloated anyway; I would really like to see someone clean house. Sorry to say that most state employees aren't worth the money we pay them anymore.

[Chilkoot]

Originally Posted by mizzile

Shhhh

But, really, do you think that given the inflated numbers of state employees, that it's going to be that bad to have layoffs? I really don't understand how state government got so bloated anyway; I would really like to see someone clean house. Sorry to say that most state employees aren't worth the money we pay them anymore.

Not to dispute that there needs to be some downsizing but what departments would you say need to be looked at the closest for these reductions? Health & Social Services? Labor? Education?

How would you “clean house”? Historically, there is also a reduction in services when staff are reduced.

I spent 1 hour waiting in line at DMV last month. How much longer will that wait be with fewer employees working there?

[pittsflyer]

Why is the first response to cut roads and other services common to everyone instead of the welfare programs? Motorists pay for dmv through tags

Originally Posted by Chilkoot

Not to dispute that there needs to be some downsizing but what departments would you say need to be looked at the closest for these reductions? Health & Social Services? Labor? Education?

How would you “clean house”? Historically, there is also a reduction in services when staff are reduced.

I spent 1 hour waiting in line at DMV last month. How much longer will that wait be with fewer employees working there?

[Chilkoot]

Originally Posted by pittsflyer

Why is the first response to cut roads and other services common to everyone instead of the welfare programs? Motorists pay for dmv through tags

It certainly doesn’t make sense sometimes, particularly when DMV takes in $30 million more than it spends.

Most welfare programs are entitlement based and are required by federal law. There are also strict accuracy and reporting requirements and costly penalties if standards aren’t met. Much of the expense for these programs is federally funded so cost savings by the state would primarily be in a reduction in staff. Reducing staff in this area may cost more in the long run due to increased penalties. It’s a difficult balance.

[AffeGeschaft]

Originally Posted by mizzile

Shhhh

But, really, do you think that given the inflated numbers of state employees, that it's going to be that bad to have layoffs? I really don't understand how state government got so bloated anyway; I would really like to see someone clean house. Sorry to say that most state employees aren't worth the money we pay them anymore.

Please supply some facts to suport this statement.
it just sounds like a bitter whiner who couldn't get a job with the state.

[pittsflyer]

So what if the state refused to pay any money to the Feds and self financed things like roads etc

I mean is the money we get from the Feds such an overwhelming amount that we tow the line and if so then we should never be running a deficit because most of the budget is social services.

Originally Posted by Chilkoot

It certainly doesn’t make sense sometimes, particularly when DMV takes in $30 million more than it spends.

Most welfare programs are entitlement based and are required by federal law. There are also strict accuracy and reporting requirements and costly penalties if standards aren’t met. Much of the expense for these programs is federally funded so cost savings by the state would primarily be in a reduction in staff. Reducing staff in this area may cost more in the long run due to increased penalties. It’s a difficult balance.