Alaska Economic forecasts. (Anchorage, Fairbanks, Wasilla: mortgage, credit, loans)

[User 2]

It's that time of year again.

A new year, and new economic forecasts are formulated each year about this time.

Alaska's long stretch of growth cycles seems to be at it's end.

Job growth is on the decline, and expected to be nearly flat at just a half a percent growth for 2008.

Losses in construction, and slowing growth in health care and other service-sector industries are expected to continue in 2008.

Since December 2006, Alaska lost 900 construction jobs.

The Department of Labor predicts 500 fewer jobs in local construction this year.

Building valuation was down by 25 percent for the first 11 months of 2007. Residential construction hit a 13-year low in 2007 and no rebound is expected in 2008.

Forecast is for more losses in the sector.


Workforce Info, Home, HOME

With foreclosures in the last quarter of 2007 jumping two to three times the number ever recorded in any previous quarter, it looks like the sub-prime mortgage meltdown has commenced here as well.

Anchorage and Mat-Su account for 6 out of 7 of the rising foreclosures.

Alaska foreclosures by RealtyTrac

Consumer credit counselors say requests for foreclosure help doubled last year reflecting those rising foreclosures in Anchorage and the Mat-Su.

Peninsula Clarion - AP News::State (broken link)

If you're thinking of buying a home, look back to about 1985 for what a housing price crash could do to your 'investment'. Falling values can be a real drag.

If you're thinking of moving to Alaska, know that there are Alaskans losing their jobs, and they will be competing for jobs in other sectors.

If you hear stories about a big project that's supposed to generate new jobs, remember that none of the projects being proposed now will even be close to actually hiring any workers for a number of years after they get their permits, and none of those projects, (Pebble, gas line, etc.), have even gotten to the permit stage.

If you want to be a waitroid unit serving tourists in Tshirts, or you like the prospect of 20 hrs a week at minimum wage, (think WalMart greeter or maybe burger 'manufacturer'), then finding a 'job' shouldn't be a problem.

But if you're looking for living wages in an area with some of the highest living costs, you might want to do some more investigation,

.......it costs a lot of money to move up here, just to move back after finding it's no better here than anywhere else.
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[Nephler]

Still looks heck of a lot better than where I'm coming from. Even the cost of living is about the same if not better than here.

[Barkingowl]

Thanks for the list of foreclosures. I have my eyes on a house in Wasilla that hopefully will be on that list before too long.

[RayinAK]

Originally Posted by Nephler

Still looks heck of a lot better than where I'm coming from. Even the cost of living is about the same if not better than here.

The cost of living anywhere near a city in Alaska is extremely high when compared to most places in the lower-48. See...charts and tables don't show the whole story. Take for example a 1,700 Sq. Foot (living space) home, sitting on an acre lot around Fairbanks:

-Property tax around $3,000 per year, sometimes more
-Septic system maintenance for a 1,000-gal. tank = $200.00 per year
-Electric bill = around $110.00 per month
-Heating fuel, over $3.00 per gallon, 500-gal. tank = around $3,000 or more during the winter months
-Driving to work and back, fuel over $3.00 per gal., around $30.00 per week during the winter months (Honda Civic)

There is no property depreciation in the Fairbanks North Star Borough. For example, my home was built in 1980. It's a well-built home, and when I bought it back in 1994 it was worth $106,000. Form 1994 to 2008, the assessor has taxed it to a property value of $200,000. The State has no income taxes, but the boroughs tax you to death.

If you come to Alaska, you better be prepared. It's not only expensive, but difficult for families to stay together. Quite often couples arrive to Alaska, and soon after the husband or the wife realizes that he or she can't stand living here, while the other loves it.

[Marty Van Diest]

Bottom line is the oil price and production. The production is on a steady decline but will not affect the economy in the short term.

The price is very high. It would still drop quite a bit without affecting the economy.

But if the price gets down into the $40 per barrel range things will be happening.

While the credit crunch has affected Alaska, any one who thinks the housing prices are crashing are in for a surprise. The credit crunch has made it much harder for marginal buyers to get loans. This has decreased demand a little but it seems to have just cooled an overheating market before it became a bubble.

Take a look at my Monday Morning Market Memo for today.

Also, if you think that a house going into foreclosure will allow you to buy it at a below market price, you are wrong there as well. The foreclosed houses sell for market value almost always.

We are no where near a 1985 style crash, I was here, I remember. That crash was caused by low oil prices which made oil jobs dry up. If we get low oil prices again...look out.

[Metlakatla]

User2, I was going to ask you this question privately (so that User3 couldn't make fun of me) but what the hell. What do you think of these little houses? They are cute.

TinyHouses

[User 2]

Originally Posted by Metlakatla

What do you think of these little houses? They are cute.

Cute they may be, but tiny houses are occupied by those with tiny lives.
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[travelmate38]

Originally Posted by Metlakatla

User2, I was going to ask you this question privately (so that User3 couldn't make fun of me) but what the hell. What do you think of these little houses? They are cute.

TinyHouses

If it were just I living alone, with perhaps my dog, I could easily live in on e of those houses. Convincing my better half, would be another story. I think you either have to be single or get along VERY well with your spouse to reside in such a home.

[RayinAK]

Originally Posted by Marty Van Diest

Bottom line is the oil price and production. The production is on a steady decline but will not affect the economy in the short term.

The price is very high. It would still drop quite a bit without affecting the economy.

But if the price gets down into the $40 per barrel range things will be happening.

While the credit crunch has affected Alaska, any one who thinks the housing prices are crashing are in for a surprise. The credit crunch has made it much harder for marginal buyers to get loans. This has decreased demand a little but it seems to have just cooled an overheating market before it became a bubble.

Take a look at my Monday Morning Market Memo for today.

Also, if you think that a house going into foreclosure will allow you to buy it at a below market price, you are wrong there as well. The foreclosed houses sell for market value almost always.

We are no where near a 1985 style crash, I was here, I remember. That crash was caused by low oil prices which made oil jobs dry up. If we get low oil prices again...look out.

I don't think the people from the lower-48 realize that the economy of Alaska is a "boom & bust" process, and that it repeats itself every few years. Back in '85, there were abandoned homes all over the Fairbanks Borough. The State economy went bust, and people had no jobs to pay for the homes they already had or were building. There was a big exodus out of Alaska.

[Metlakatla]

Cute they may be, but tiny houses are occupied by those with tiny lives.

That suits me just fine as I have a tiny life.

I've already done the big house thing, as you well know. Now that the Prince of Wales is an adult, all I really need is a small place. This would be a secondary home if I get in on the Harris River land lottery thing.

edited--I thought I was responding to User3 when I first answered this.