KENAI — While the price for homes is cheaper in Fairbanks, purchasing a home in the Kenai Peninsula Borough may be the most affordable option statewide.
Statistics from the Alaska Department of Labor and Workforce Development show that the average price of a home on the peninsula in the first half of 2015 was close to $266,000. Homes in Fairbanks are about $26,000 cheaper on average, the Peninsula Clarion reported.
However, Kenai may be the most affordable city overall when its relatively low utility costs and cost of living are taken into account, said state economist Alyssa Rodrigues during a Jan. 28 presentation at the annual Industry Outlook Forum in Kenai.
“When we look at the affordability index, Fairbanks isn’t necessarily more affordable even though it looks more affordable here, because we don’t look at all at utilities,” Rodrigues said. “Although Kenai looks like it’s less affordable, if we were actually to put in the heating costs for Fairbanks, I would wager a guess that Fairbanks is probably more expensive.”
Rodrigues said the figures from the department’s December 2015 analysis take averages for income and housing costs that are “everyone’s average and no one’s average.” The numbers are recalculated every year, she said.
The most expensive homes were reported in Anchorage, Juneau and Kodiak.
Kenai Peninsula’s food and construction material costs are higher than in Anchorage, but because Anchorage’s housing is so much more expensive it balances out the costs to make Kenai more affordable, said Melissa Houston, the associate director for strategy at the University of Alaska Anchorage Center for Economic Development.
“Because housing is such a large share of a typical family’s expenses, it frequently offsets higher prices in other categories for some peninsula communities,” Houston said. “The cost of housing in the Kenai Peninsula Borough is less expensive than the Mat-Su Borough or in Anchorage. Overall, the cost of living is less than Mat-Su and significantly less than Anchorage because of the effect of housing.”
The peninsula has consistently had more affordable housing than the rest of Alaska, said Soldotna-based real estate agent Marti Pepper. The peninsula’s economy is diverse enough that its real estate market has not felt the impact of cuts as much as other areas in Alaska have, but it is difficult to predict what may happen in the future, Pepper said.
“I don’t know what’s going to happen with the continual layoffs in the oil fields, because that’s a lot of our community,” Pepper said. “It is affecting our community, and some of the smaller businesses are being affected by it, and they’re the ones that are catering to the oil fields.”