DOING BUSINESS IN ALASKA

Anchorage income by population percentage
Graphic courtesy of Sperling’s Best Places

The current Alaska economy and future economy typically does not experience the boom and busts that the lower-48 has experienced in the 2007+ years through a loss of jobs and and over-heated residential home real estate market.

Doing business in Alaska from an investment standpoint, Anchorage has a limited supply of acreage for residential and commercial real estate development which tempers the highs and lows that other markets might experience.

A key indicator that always ranks Alaska at the top of the list is that there is cash on hand to cover short-term spending, yearly revenues that exceeded sending, low levels of debt, and relatively small levels of non-pension benefits.

According to Anchorage Economic Development Corp. CEO Bill Popp, “There is no doubt, we are going to feel some significant pain in next couple of years, but by no means is the Anchorage economy headed for a disastrous time like the 1980s,” said Popp, speaking of the worst recession in Alaska’s post-oil history. “Think of the downturn we face as more of a pinch than a punch to the economy. It’s going to hurt and it’s going to leave a mark. But it’s not going to be a knockout blow.”

Karinne Wiebold writes in the Alaska Economic Trends May 2017 issue that the average price of a single-family home in 2016 went slightly up giving some credit to persistent low-interest rates.

With a stable but growing residential real estate market, commercial real estate and business development usually piggyback the same trendlines.  Fewer foreclosures of both residential and commercial properties in 2016 also boost confidence in future investments.