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Average Cost of Living in Anchorage, Alaska

Thinking about buying a house in Anchorage, Alaska? Make sure you’ve budgeted for the true cost of homeownership. Read our article to find out what you need to know about the housing market in Anchorage and the city’s cost of living.
Thinking about buying a house in Anchorage, Alaska? Make sure you’ve budgeted for the true cost of homeownership. Read our article to find out what you need to know about the housing market in Anchorage and the city’s cost of living.

If you’ve saved enough for a down payment on a house and are ready to buy, you’ll want to project your entire cost of living before taking the plunge into home ownership. There’s more to owning a home than its sticker price. Factors such as a city’s overall cost of living and property taxes can make some homes unaffordable.

Home buyers relocating to Anchorage, or those who are unfamiliar with different neighborhoods, should talk with a top local real estate agent to get advice.

They’ll know the best areas to live in and help you set realistic expectations of affordability.

Typical Home Prices in Anchorage in 2019

While a smaller city with a population of roughly 295,000, Anchorage has high median home values. The median home value of a home in Anchorage is $340,400. Home values only rose 0.5% last year and are only predicted to rise another 1.9% in 2019.

Home sell quickly in Anchorage, spending just slightly over two months on the market. For the last two years, there have only been an average of 30 new homes added to the housing stock in Anchorage, and this drives increased demand for existing inventory. 27% of homeowners in the city have incomes above $150,000, and 71% have pre-tax income above $75,000, indicating that those with higher incomes are keeping home prices higher.

The housing market in Anchorage is balanced and doesn’t lean towards either the seller or buyer. Spring and summer are the best times to buy, given Alaska’s harsh winters, and you can choose from the largest supply of homes. If you’re trying to time the market to get the best deal, talk to an experienced realtor who’s on top of local trends.

How Much Are Anchorage Property Taxes?

Some cities in Alaska don’t even levy property taxes, but Anchorage isn’t one of them. Luckily for home buyers, the average county tax rate in Anchorage isn’t bad. It’s 1.355% of the home’s assessed value and annual property taxes average $3,388 in the city.

The average for annual property taxes looks higher than other areas because it’s based upon higher underlying home values. The city assigns a home its value annually, and the local assessor visits the property once every six years. You only have 30 days to dispute an assessment.

There are several exemptions available for homeowners in Alaska which can lower your property tax bill. Senior citizens in Anchorage can claim a $150,000 exemption on their home’s assessed value, which can significantly reduce their taxes. Veterans, widows, and the disabled can also receive exemptions, but all exemption requests are due by March 15th of the tax year.

Overall, Alaskan residents save money by living in a state with no state income tax and which pays out dividends from the state’s permanent fund. Residents can receive anywhere from $800 to $2,000 in a yearly dividend check, which can be used to offset property taxes. There are no transfer taxes on home sales.

For more information on Alaska real estate taxes, read the Ultimate Guide to Alaska Real Estate Taxes.

Average Homeowners Insurance in Anchorage

Often the next largest expense for homeowners, after property taxes, is homeowners insurance. This insurance protects your home from damage because of a natural disaster or another issue, and mortgage lenders require that you carry it to protect their investment.

The average annual rate for homeowners insurance in Alaska is just $908, 26% less than the national average. Factors which will impact your rate include your home’s age, as older homes cost more to insure. The more expensive your home, the higher your rate, too.

Past claims on the property, such as snow and ice damage, will also influence how much you pay. If you can afford to carry a higher deductible, it will reduce your monthly premiums.

Common Home Maintenance and Repair Costs in Anchorage

Common weather-related home maintenance problems in Anchorage relate to flooding and the winter.

You can expect to have issues with ice dams on your roof and should have your home inspector carefully inspect its grade. If they become a real issue, you might have to install heat coils to warm your roof and prevent damage. They cost between $600-900 to install, plus the cost of electricity to run them.

Newer homes have built the living quarters elevated above a garage, but in older homes ask the previous owners about any past flooding. Allocate money out of your yearly budget to maintain the landscape’s grading and gutters and downspouts.

Experts advise that homeowners set aside 3% of their home’s value each year to cover maintenance and repairs. It’s a cost to homeownership that you should be sure you can afford before buying.

Other Costs of Living in Anchorage to Consider

While many residents love the city’s natural attractions, plus easy access to the mountains for hiking, fishing, and camping, the cost of living in Anchorage isn’t a plus. Overall, it’s much higher than the national average.

Groceries, healthcare, utilities, and transportation all cost significantly more than nationwide. Because of its climate, Alaska can’t grow a lot of its food, and most produce has to be imported — therefore it’s quite expensive. Cold and snowy winters lead to some of the highest utility bills in the country, and since summers can reach scorching highs, residents don’t get a break in the summer.

A car is a necessity in Anchorage, which only has limited bus routes. While auto insurance and gas aren’t bad, factor in the cost of transportation and snow removal at your new home when putting together your budget.

If you have questions about the cost of living in a particular neighborhood, draw on your realtor’s local knowledge. They can provide invaluable advice on cost-saving measures.

Find a Top Anchorage Real Estate Agent

If you want to save money but still find a great house, work with a top real estate agent. They’ll have the inside scoop on the best neighborhoods in Anchorage, or know about homes before they even hit the market. Negotiations are a crucial part of getting a good deal and experienced realtors will know where they can negotiate to save you money.

Clever Partner Agents join our network from nationally recognized brokerages. They’re top-rated in their offices and offer on-demand showings so you can get in to see a home on your schedule. To find out more about working with a Clever Partner Agent, reach out today!

 

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Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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