The cost of renting two-bedroom apartments in Alaska was up 7% in the past year, marking the biggest increase since the year 2011. Recent years have seen an increase of 2.
According to new data from the state taken from a survey of landlords from 11 of Alaska’s most populous communities. The state economics Rob Kreiger co-authored the report and noted that, although it’s hard to pinpoint any one factor that triggered the rise in rent however, many cost to landlords, such as utilities and property taxesare rising by a significant amount over the last two years.
Kreiger stated that vacancy rates were up a bit over the past year, but remain relatively low, which means that there are less apartments and houses to choose from.
“And when you’re in such constrained market conditions that make it difficult to find a suitable rental, it makes landlords more price-sensitive,” Kreiger said. “So you’d typically expect to see that with an extremely low rental market, rents are likely to rise.”
Kreiger stated that a small number of houses are constructed in the state, and that’s one reason why the housing supply is so low. Kreiger said it was difficult to construct during the years of pandemics during which construction costs increased dramatically. While those costs have slowed however, the abysmal shortage of Alaskan workers remains a major obstacle.
Kregier said that the lack of workers will likely increase prices at apartment complexes with larger sizes in which hard-to-find maintenance and administrative personnel are now paid higher salaries.
In the report, the state acknowledged the impact of an increasing number of rentals for short-term rental, however, Kreiger claimed that they had few data points to draw from.
“What proportion of the total rental inventory, including housing, comprises short-term rentals? We don’t know,” Kreiger said. “And If there are cases documented renting short-term properties in which you’re experiencing change from those who are moving from short-term to long-term and what percentage of the rent is being removed from the rental market because of this? These are questions that we do not have the answers to.”
He believes it to become an increasingly important subject that local government will need to take the initiative on.
The rises in median rent differed according to region and region, with Ketchikan experiencing an increase of 16% between March 2022 through March 2023, with all other increases being in single numbers. Bethel was surveying in the very first survey in 2018 and had its highest average rent, which was $1,600 per month, minus utilities. The other communities also had utilities included in.
Kreiger stated that he’s looking to conduct a survey in more rural areas, like Nome and Dillingham However, he suspects that the averages of these areas are identical to the Bethel’s.
Kreiger claimed that the cost of heating in Fairbanks could be the reason why, when utility costs included Fairbanks ranked in the third spot behind Anchorage.
Kreiger did not want to speculate on the future of rental prices However, he noted that prices for housing have been high from March, the time it was the time to conduct the study.
