ALASKA'S ECONOMY

I'm not an economist, but when you're thinking of real estate, it's smart to take the overall economy into account. First, foreclosures. Too many, and property values take a hit. Part of it's the increasing supply, part is the run-down factor of these properties, and part is the psychology of the market, the effect of consumers when they drive past a legion of "foreclosed" or "bank-owned" signs.

Though Alaska received nearly $20 million from the US Department of Housing and Urban Development (HUD) to rebuild neighborhoods with lots of foreclosures, there really aren't many of those neighborhoods in Alaska. Our housing market didn't spike like a lot of markets, so it hasn't fallen off as much either. We didn't see a huge amount of house-flipping, so we're not seeing huge numbers of investment properties foreclosing now.

Perhaps most important, those of us in the real estate industry were a bit parochial about lenders. Even during the boom days, we encouraged buyers to use in-state lenders. Alaska Housing Finance add-ons like the first-time homebuyer and energy programs required in-state financing. And there wasn't a whole lot of "creative lending" going on up here. Result: fewer foreclosures now that the national economy has tanked. But of course we have some, and $20 million will go a long ways toward sprucing up some of our neighborhoods.