Is The Alaskan Real Estate Market Overpriced and Due For a Correction? (Fairbanks: for sale by owner, apartment)

[6.7traveler]

I understand there's limited private land in Alaska that contributes to the high prices, but it seems like prices are out of touch with the local economy. It seems in most areas that $200k doesn't even get you much of a house. Then there's the Craiglist sellers who think their 5 acres of black spruce in Tok is worth $30k. Even in far out places it seems like houses and land is crazy expensive. I recently saw a 1/3 of an acre for sale in Bethel for $33k and an acre 6 miles outside of Nome for $45k. The prices in Fairbanks are crazy too.

I get that almost everything is imported up here and that also drives up the price. But can the local economy keep supporting these ever rising prices? Why is an old rundown house worth $200k in Fairbanks?

I'm curious on your thoughts with the economy stagnant at best if we are in for a BIG drop in real estate prices or if it's business as usual? I know that some people have some very high paying jobs up here but it seems like a majority of people would be fairly house poor getting by on regular jobs. Does it have anything to do with rents being out of control as well? Or is it simply supply and demand and this will continue indefinitely? Who is buying these expensive houses?

Maybe I'm just really poor and this is all my personal perception . Luckily I own my own place free and clear but I'm looking to buy some more land and the good deals seem to be almost non existent. Just curious on other peoples thoughts on this. Will there be a repeat of the 80's where I can pick up some real estate for a fair price?

[Campfires]

There's 2 houses on the Chena river selling for $250,000/150ft2. They look pretty nice. That's off of Zillow.

[Metlakatla]

Hell, idk. I know that prices on the panhandle have been driven up by summer home peeps and offshore businesses.

[riceme]

There's a piece of land that the state chopped up and is selling off in <5-ac lots out on and off the river outside North Pole. There is no access and no power, the land floods every couple years, and a lot of it is just marsh.

They were all for sale for about $60k/ea last time I checked.

I am no economics mastermind, but it does not seem to me that our local economy can support those types of real estate prices.

[stiffnecked]

Even rents are nutz. Just saw a 10' x 20' efficiency apartment in Ketchikan for $750 a month. Utilities were extra. My storage shed is bigger then that.

[arctichomesteader]

There is cheap, half decent (but generally remote) land up there. You just have to know where to look. Something I've found over the years is that anywhere you go, generally realtors will not handle the best deals. The realtor needs a cut and a cheap property isn't worth their time unless business is real slow.

[riceme]

Originally Posted by stiffnecked

Even rents are nutz. Just saw a 10' x 20' efficiency apartment in Ketchikan for $750 a month. Utilities were extra. My storage shed is bigger then that.

It's similar in the Fairbanks area. If you're lucky, the place has water.

I can't wait for Pitts to chime in. I'm going to get the popcorn... don't start without me.

[6.7traveler]

Originally Posted by Metlakatla

Hell, idk. I know that prices on the panhandle have been driven up by summer home peeps and offshore businesses.

Yeah, being so scenic and close to seattle and geographically very limited useable land there, It makes sense that S.E. AK has high prices. I really don't know much about the housing situation down there.

Originally Posted by riceme

There's a piece of land that the state chopped up and is selling off in <5-ac lots out on and off the river outside North Pole. There is no access and no power, the land floods every couple years, and a lot of it is just marsh.

They were all for sale for about $60k/ea last time I checked.

I am no economics mastermind, but it does not seem to me that our local economy can support those types of real estate prices.

I agree, there's some crazy asking prices out there on less than stellar stuff in the interior. I don't get how people are buying some of this stuff. Surely it's not selling for anywhere close to asking price, if it all.

Originally Posted by stiffnecked

Even rents are nutz. Just saw a 10' x 20' efficiency apartment in Ketchikan for $750 a month. Utilities were extra. My storage shed is bigger then that.

Ha, you could probably get a few takers for your storage shed at $500 a month if it's in FBX.

Originally Posted by arctichomesteader

There is cheap, half decent (but generally remote) land up there. You just have to know where to look. Something I've found over the years is that anywhere you go, generally realtors will not handle the best deals. The realtor needs a cut and a cheap property isn't worth their time unless business is real slow.

The cheap, half decent land deals do exist, but they are the exception, not the rule. I stumbled across mine with nothing but a for sale by owner sign. I assume a lot of these people asking ridiculous prices aren't selling as I see the same stuff on the market for years. Do they really want to sell or just list it for top dollar to see what happens? There's definitely not a plethora of cheap accessible land that is any good up here. I've looked literally everywhere and see more bad deals than good.

Originally Posted by riceme

It's similar in the Fairbanks area. If you're lucky, the place has water.

I can't wait for Pitts to chime in. I'm going to get the popcorn... don't start without me.

very true. A dry cabin is almost the only way you can afford to rent in FBX. I'd be scared for my safety staying in a sub $1000 a month apartment there.

I'm glad there's at least some agreement that real estate is on the high side. I think it's a great time to sell and a horrible time to buy here. The local economy can't support these ever rising inflated prices and something will have to give.

Is it like this everywhere in America? Are we seeing a repeat of 2006-2008 happening right now? Or will real estate forever keep rising why wages stagnate?

[arctichomesteader]

Originally Posted by 6.7traveler

Is it like this everywhere in America? Are we seeing a repeat of 2006-2008 happening right now? Or will real estate forever keep rising why wages stagnate?

I can't speak for everywhere but in the northeastern area I'm in, looking at VT/NH/ME real estate, I'd say there's been a slight increase in prices since the 2008 crash but not a major increase. I don't see property moving very quickly. I bought 10 acres in VT for $30k and that's sort of cheap for the area for land that hasn't been logged off first but high considering land in that price frame comes with no road maintenance or access to utilities. I could buy the neighboring 10 acres for the same amount if I can come up with it. I'm not sure if I would or not.

I've been watching for some more Alaskan land to buy for long term plans (no hurry, may buy next year or year after) and while I've seen some deals I do get the gut feeling that I should wait. I don't think the economy is particularly healthy there right now so there may be some bargains in the future. I'm not a prophet so don't quote me on that. But I don't think prices are a lot worse than 2008. Somewhat higher but not much. That's not looking at places near civilization like Fairbanks though.

[Metlakatla]

FBs sounds like a mess these days. Apparently, stealing Christmas packages is a thing now. WTH is wrong with people, anyway, stealing little kids' toys to sell for drugs.

I've noticed prices going up and up in Oregon and Washington, but that's being caused by out-of-state equity money coming in. I doubt the same applies to FBs, but who knows; someone's buying it and it doesn't sound like the local economy supports those prices.