Fairbanks experiences housing price inflation amid shortage
FAIRBANKS, Alaska (KTVF) - Fairbanks is seeing inflation in housing prices.
One reason for the inflation is that demand for housing is greater than the supply available.
Shane Nicholson, President of the Greater Fairbanks Board of Realtors, explained, “We have a really low inventory on the market right now, with a lot of buyers. Of course, we’re a huge military town, so we have a lot of people from Eielson Air Force Base and Fort Wainwright coming in.”
According to Nicholson, 60-80% of people coming to town and buying homes are with the military.
As military servicemembers continue to move to Fairbanks, the COVID-19 pandemic has delayed soldiers already stationed in the community from leaving. Nicholson said, “We’re having a larger amount of soldiers and airmen move up, but we haven’t seen an [outflow] of people leaving.”
The month of March normally sees an influx of housing to the market each year. However, during the pandemic, housing that would normally be sold this spring was put up for sale last fall, leaving a current housing shortage in its wake.
Nicholson said 2020 also saw low interest rates on mortgages, allowing more people to buy homes during the pandemic. “The inventory’s been sold already, so we’re seeing houses that pop up in the market... instead of 10, there’s one or two a week.”
The high price of building materials also plays a role, according to Nicholson. “If you’ve gone to Home Depot or Lowes, you’ve noticed that building material has skyrocketed three times, so take all that into account.”
Nicholson says the market should start to settle this fall and into 2022. “I think that as both military bases start to normalize a little bit and people get back on their moving rotation that we’ll start to see more inventory hit in the springtime. We’ll see kind of an even number of people leaving and an even number of people coming.”
The current market trends make this a good time to sell a home, unless the seller plans to immediately buy a new home in the Fairbanks area.
If you’re looking to buy or sell a home, Nicholson recommends going through a local realtor to help navigate the process.
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