State Real Estate Market Outlook
Realty Market Outlook Alaska State Profile - Spring 2006
Alaska homebuilding activity moderated, while price gains accelerated.
Under pressure from rising interest rates and building costs, residential building permits declined in 2005. In 2006, ISER expects gains in the state’s residential construction spending to be modest, reflecting rising input costs.
Alaska home prices appreciated by 14.1 percent year-over-year during fourth quarter 2005, slightly outpacing a national average of 13 percent.2 Home price appreciation reached 15.1 percent in Anchorage and 9.3 percent in Fairbanks.
Innovative mortgages and investors may be influencing housing demand. Interest-only and negative amortization loans accounted for 23 percent of non-prime mortgage originations in Alaska in the first 11 months of 2005. During the same period, investors and second-home purchasers accounted for 26 percent of Alaska Alt-A mortgage originations.
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