Anchorage is home to the best residential real estate investment market in Alaska.
The 99518 zip code in Anchorage presents the greatest opportunity for the best real estate investments among the 96 individual real estate markets in Alaska we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.
5 best places to invest in Alaska
| Rank | City | InvestScore | Affordability | Property value appreciation |
|---|---|---|---|---|
| 1 | Anchorage | 100 | 3.4 | 22.65% |
| 2 | Soldotna | 88.5 | 3.8 | 24.34% |
| 3 | Eagle River | 77.9 | 3.3 | 19.20% |
| 4 | Fairbanks | 76.2 | 2.9 | 15.31% |
| 5 | Homer | 74.2 | 5.0 | 29.52% |
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1. Anchorage
We've identified the 99518 zip code in Anchorage as Alaska's best real estate investment market. Here's why.
🔎 Key data about Anchorage
| Data point | Value | Rank in state (of 96 markets) |
|---|---|---|
| Zip code | 99518 | N/A |
| InvestScore | 100 | Highest |
| Typical property value | $299,314[1] | 4th lowest |
| Five-year appreciation | 22.65%[2] | 6th highest |
| Household income | $86,963[3] | 15th highest |
| Affordability ratio | 3.4 | 3rd most affordable |
| Five-year population growth | 2.7%[4] | 7th highest |
| Unemployment rate | 1.9%[5] | lowest |
| Property taxes | $3,646[6] | 11th lowest |
| Educational attainment | 31%[7] | 14th highest |
Anchorage (zip code 99518) is the best residential real estate investment market in Alaska. It has the 6th highest property value appreciation among markets we evaluated, with a 22.65% appreciation of the typical property over the last five years.
Anchorage is the 3rd most affordable market among the 96 Alaska markets we evaluated, with an affordability ratio of 3.4.
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2. Soldotna
The 99669 zip code in Soldotna is the runner-up spot for the best real estate investments in Alaska.
🔎 Key data about Soldotna
| Data point | Value | Rank in state (of 96 markets) |
|---|---|---|
| Zip code | 99669 | N/A |
| InvestScore | 88.5 | 2nd highest |
| Typical property value | $333,400[8] | 11th lowest |
| Five-year appreciation | 24.34%[9] | 3rd highest |
| Household income | $88,552[10] | 14th highest |
| Affordability ratio | 3.8 | 10th most affordable |
| Five-year population growth | 12.0%[11] | highest |
| Unemployment rate | 5.4%[12] | 15th lowest |
| Property taxes | $1,961[13] | 2nd lowest |
| Educational attainment | 26.2%[14] | 21st highest |
The 99669 zip code in Soldotna features a typical property value of $333,400, the 11th lowest in the state.
Property values have appreciated 24.34% over the past five years, the 3rd highest increase among evaluated markets in the state. Soldotna homes have an affordability ratio of 3.8, the 10th most affordable in the state.
3. Eagle River
The 99577 zip code in Eagle River comes in at No. 3 in our ranking of the best residential real estate investment markets in Alaska.
🔎 Key data about Eagle River
| Data point | Value | Rank in state (of 96 markets) |
|---|---|---|
| Zip code | 99577 | N/A |
| InvestScore | 77.9 | 3rd highest |
| Typical property value | $440,743[15] | 20th lowest |
| Five-year appreciation | 19.20%[16] | 11th highest |
| Household income | $131,993[17] | 2nd highest |
| Affordability ratio | 3.3 | 2nd most affordable |
| Five-year population growth | -0.3%[18] | 11th highest |
| Unemployment rate | 2.3%[19] | 2nd lowest |
| Property taxes | $5,281[20] | 23rd lowest |
| Educational attainment | 47.5%[21] | 2nd highest |
With a typical property value of $440,743, Eagle River's 99577 zip code features the 20th lowest property values in the state.
Eagle River homes have an affordability ratio of 3.3, the 2nd most affordable among the markets we evaluated.
4. Fairbanks
The 99712 zip code in Fairbanks ranks No. 4 among Alaska's residential real estate investment markets.
🔎 Key data about Fairbanks
| Data point | Value | Rank in state (of 96 markets) |
|---|---|---|
| Zip code | 99712 | N/A |
| InvestScore | 76.2 | 4th highest |
| Typical property value | $305,895[22] | 8th lowest |
| Five-year appreciation | 15.31%[23] | 17th highest |
| Household income | $105,787[24] | 17th highest |
| Affordability ratio | 2.9 | most affordable |
| Five-year population growth | -8.9%[25] | 21st highest |
| Unemployment rate | 5%[26] | 10th lowest |
| Property taxes | $3,737[27] | 12th lowest |
| Educational attainment | 33.4%[28] | 13th highest |
Property values in Fairbanks's 99712 zip code have seen the 17th highest increase among evaluated markets in the state, with an appreciation of 15.31% over the past five years.
Fairbanks's affordability ratio of 2.9 makes it the most affordable among the 96 markets we evaluated.
5. Homer
The 99603 zip code in Homer rounds out our top five residential real estate investment markets in Alaska.
🔎 Key data about Homer
| Data point | Value | Rank in state (of 96 markets) |
|---|---|---|
| Zip code | 99603 | N/A |
| InvestScore | 74.2 | 5th highest |
| Typical property value | $361,622[29] | 12th lowest |
| Five-year appreciation | 29.52%[30] | 2nd highest |
| Household income | $73,007[31] | 2nd highest |
| Affordability ratio | 5.0 | 22nd most affordable |
| Five-year population growth | 8.7%[32] | 2nd highest |
| Unemployment rate | 7%[33] | 20th lowest |
| Property taxes | $2,412[34] | 4th lowest |
| Educational attainment | 39.9%[35] | 7th highest |
Property values in Homer's 99603 zip code rose 29.52% over the last five years, ranking the city 2nd highest among evaluated markets in Alaska.
Homer homes have an affordability ratio of 5.0, the 22nd most affordable among the markets we evaluated.
Investing in residential real estate can be one of the best passive real estate investments in Alaska.
Residential real estate offers accessible passive income and the potential to compound your original investment.
Renting out residential units is the top way to invest in real estate. House hacking also offers a great opportunity for passive real estate investment income.
How we rank residential real estate markets in Alaska
To determine the best real estate investments in Alaska we evaluated 96 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in Alaska.
What is InvestScore?
InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.
- Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
- Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
- Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income.
- Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
- Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
- Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
- Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
- Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.
🚨 Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.
