Many investors and buyers wonder if Real Estate is still a good investment. Will I continue to get a good appreciation rate. For about six years, beginning in about 2001, real estate in many areas of the country enjoyed double digit appreciation rates. New terms entered our vocabulary, like "Fip this House". People would purchase a house, fix it up a bit, and then sell it a month or two later for a tidy profit. In places like Las Vegas, out of state buyers would purchase a new house under construction from a Builder. Six months later, as the house was being completed, they would list it with a Realtor, and sell it for sometimes as much as 15 to 20% more than they paid for it. If they purchased a $500,000 house, they usually gave the builder a 10% deposit ($50,000), and in six months, the house was worth 20% more than the purchase price. When they sold it, it sold for $600,000, profit of $100,000. This was flipping on steroids, and too much of this activity has resulted in over building, and the decline of the market in such geographic locations.
Alaska investors do not have to worry about the market crashing here as in the above senerio. One of the reasons was the "Flipping Phenomone" never really took root here. Sure there were a few investors who purchased and fixed up houses and sold them, this has always been the case. Yet buyers were not going into new subdivisions, entering into contracts with builders, and then selling the house just as it was being completed. Market values here in the Anchorage and Mat-Su area are still appreciating at about 3% per year; a good healthy appreciation rate. A recent national study ranked Alaska as one of the lowest places in the nation where a decline in the housing market was probable. In fact there was only a 2% chance market values in Alaska would decline. Said another way, there is a 98% chance market values will continue to appreciate.