It was a big year in the Alaska real estate market, and you might not even realize it. That’s why we are recapping the 2025 market in this episode. We discuss the impacts of regulation, housing affordability challenges, and the risks of stock market versus real estate investing.

Risk in Real Estate vs. Stock Market

1. Real estate and the stock market both come with risks. But there is one reason why it is often a better idea to invest in real estate rather than the stock market.
2. There is no leverage in the stock market. If something costs a dollar, you pay that full dollar. With real estate, however, you have a chance to make more than you put in. This is due to the tax advantages and incentives in commercial real estate.
3. Even though there is still market uncertainty in real estate, the tax advantages, incentives, and long-term dynamics often outweigh the risks.

Commercial Real Estate Trends

1. One trend going on in Anchorage is the musical chair effect. This is where there are no new tenants or industries moving into offices. Instead, the companies already around are just relocating between buildings, leaving an abundance of “for lease” signs on office space.
2. Oil, gas, and politics also affect commercial real estate, as potential new companies rely on these factors for future growth.

Residential Market Dynamics

1. Putting down a payment for a house isn’t as simple as it was in the 50s. We can say our grandparents had it so much easier than those trying to do it now.
2. Many homeowners are completely shocked by current mortgage costs, and some may only be able to afford homes they don’t really want.

Luxury and Valley Market Growth

1. Even though the economy isn’t the best right now, we are still seeing multi-million-dollar homes being sold in Anchorage and the Mat-Su Valley. Often, it is buyers from all over the world who are looking for second homes or vacation homes.
2. If you’re wondering which area is more affordable, we suggest the Mat-Su Valley. It is cheaper to buy a home there than in Anchorage due to land availability, soft costs, and regulation.

“The question is, can you afford a place to live, or are you going to end up renting?” - Connie Yoshimura

“Many people can afford a home. They might not want to live in the home they can afford.” - Lottie Michael

Timestamps

01:14 – Vacancy in Anchorage Commercial Real Estate

03:00 – The BP Building Story & National/International Influence

04:04 – Risk/Reward & Leverage in Real Estate

05:57 – Boomers, Equity, and Residential Market Dynamics

08:23 – Down Payments, Affordability, and Veteran Loans

10:01 – Anchorage’s Million-Dollar Market & The Valley

12:10 – Cost Structure: Land, Regulation, and Affordability Gaps

16:02 – Shifts in Commuting, Work, and Residential Choice

20:07 – Upcoming Podcasts and Closing Thoughts

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