NAHB recently unveiled an index that tracks housing markets on the mend: the NAHB/First American Improving Markets Index (IMI). The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway. The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health. The three indicators are employment, house price and single family housing permit growth.
For the second release, 23 markets are currently classified as improving under a conservative examination of local economic and housing market conditions. Among these areas is the Anchorage Alaska metropolitan statistical area (MSA).
The housing market in Anchorage is doing well due to the presence of Joint Base Elmendorf-Richardson (JBER) which employs 18,500 people or about 10% of the local labor force, in addition to growth in the healthcare sector and a healthy commercial real estate market. According to Wes Keller of First American Title and a member of the Anchorage Home Builders Association “The construction of Tikahtnu Commons in northeast Anchorage near JBER is solid evidence that our job and housing markets are doing well. It is proof that people have extra money to spend and are optimistic. And with JBER holding its own and tourism doing well we have lots of opportunities up here.”
Comparing occupational data from the 2000 Census to the 2009 American Community Survey confirms this. Today there are 44% more employed persons in the MSA than there were in 2000. This growth has been spearheaded by 14,000 (or 74%) more new jobs in service occupations, 8,500 (or 70%) more new jobs in construction, 18,500 (or 40%) more new jobs in management, professional and related occupations and almost 10,000 (or 27%) more new jobs in sales and office occupations. Moreover, except for a small decline in the number of workers in farming (-143) there have been increases in every occupation and every industry with construction leading all industries with an increase of 6,500 (or 82%) increase in employment. Based on data from the Alaskan Department of Labor, except for a 0.6% decline in employment in 2009, there has been positive job growth in Anchorage every year since 1999.
According to home builder Andre Spinelli another factor contributing to the success of the local market is that “during the first half of the decade, when others were overbuilding, we didn’t. Because of that house prices never fell and the foreclosure problem has been limited.” However, he went on to say that “the move up market has been weak as potential move-up buyers have been fearful of not qualifying based on what they hear from the national media. As a result, the new housing market has been mostly first-time buyers and families needing more space due to newborns.” Nonetheless, home prices have remained stable during the downturn. House prices have moved up 1.2% since the trough in January 2010 and are just 0.6% off their all–time high set in June 2010.
Improving economic conditions have resulted in payroll employment being just 0.5% off from its peak in July 2011, and up by 4,000 since the trough set in December 2007. Single family permitting activity is up 4.4% on a seasonally adjusted monthly average basis from the trough set in January 2009. While new homes are being built across all of the MSA, activity is most pronounced in Anchorage and Eagle River both of which are part of the Municipality of Anchorage.