Alaska is a promising real estate sector that appears to be on an upswing. The state’s economy is boosting job growth after years of recession. Many oil-dependent states observed heavy job losses over the past decade. In 2016, Alaska lost 1.82% of its jobs. It lost another 1.25% in 2017. However, economists now have a cheerier economic forecast for the state. The years of decline have brought real estate values to rock bottom prices. Alaska’s economy is on an upward trend, making now a great time to invest in the state’s real estate sector.
Alaska has cities which are showing a lot of potential for real estate investment.
Here are the 5 Best Real Estate Investment Markets in Alaska.
Wasilla was made famous by its former mayor and former vice-presidential candidate Sarah Palin. It is one of the most promising options of Alaska real estate.
The downturn in the energy sector negatively impacted many towns in terms of home value appreciation. Many cities and towns have seen a downhill trend in the real estate sector for many years. However, Wasilla has countered the trend.
The median home price in Wasilla is $267,000. It saw a tremendous $14.2% one-year change from 2017 to 2018. The forecast for this year also sounds promising. Real estate values in the city are anticipated to go up by about 4%.
Juneau is a lucrative real estate market right now. Its economy is not only dependent on resource extraction. Its population expands by about 6,000 people every day during the summer when the cruise ships come in.
Juneau presents the perfect mix of city activities with a rural lifestyle. It has a booming nightlife, there are plenty of restaurants, and you can always spot a music festival.
The median home value in the state capital is $384,100. It observed a decline of 0.8% between 2017 and 2018. This is expected to recover slightly this year. However, as the state’s economy starts to rebound, investors can expect higher profits in the years ahead.
Home values have been dipping in this city for years. However, a steady jobs forecast is also believed to help its housing sector. The oil industry employment in the state capital fastened last year after crushing job losses over the past decade. This has resulted in an increasingly robust housing sector with new development projects continuously springing up.
Median home values in the state’s largest city are $331,000. They declined by 2.3% from 2017 to 2018, and they are advancing to slide by about 1% this year. However, the Anchorage real estate market has a small supply of homes compared to what is a growing demand as jobs return to the city.
If you are looking for an affordable Alaska town to buy a property, then you should sincerely consider Homer. The town is a delight for residents and tourists. It has alpine glaciers, majestic mountains, forests, and water. It also attracts fishers, whale watchers, and tourists.
Property prices in Homer are entirely below the state average. The median home value in Homer is $274,600. Rental properties are considered a particularly good investment in Homer due to their limited supply.
Fairbanks sits beside the Chena River and plays a dominant role in the economy of the state. Its economy is based on jobs at the University of Alaska at Fairbanks, at local mines, and in forestry.
The median home values in Fairbank is $246,700. The city is an excellent place to invest in rental properties.
The local university campus not only draws young professionals to the city in need of homes to rent or buy, but it also presents a regular supply of students looking for short-term accommodations and willing to pay a premium on rent.
Let’s also get a better understanding of the 1031 Exchange.
A 1031 tax-deferred exchange allows investors to reinvest the profits from the trade of investment property in one or more replacement properties without inviting immediate federal (and most state) capital gains taxes on the appreciated value. When the sale and purchase fulfill the 1031 exchange standards, taxes are delayed until the newly procured property is sold. This deferral strategy can be duplicated through any number of exchanges until the tax liability crosses into the individual’s estate upon death.
If you opt for a 1031 Exchange property for sale in Alaska, you should be aware of the basics. IRC Section 1031 enables an accurately structured exchange allowing any investor to trade property and reinvest the profits in a brand-new property and to put off all capital gain taxes. IRC Section 1031 (a)(1) states:
“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”
1031 Exchange enables your money to churn the maximum profit for you. However, the process of 1031 exchange in Alaska is extremely complex in nature, and it would be wise to seek guidance from expert professionals. We have extensive experience in handling highly profitable exchanges for our diverse client base.
For consultation and assistance regarding 1031 Exchange in Alaska call – 888-993-2835 or email us at info@1031xchange.com
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IRC Section 1031, IRC Section 1033, and IRC Section 721 are complex tax codes; therefore, all the investors/clients/consumers are advised to consult their tax and legal professional for details regarding their situation on any kind of investment. There are material risks every investor should know, associated with investing in 1031 Exchange properties, Delaware Statutory Trust (DST) and any other kind of Real Estate Properties. The risks include tenant vacancies; declining market values; potential loss of entire investment principal; that past performance is not a guarantee of future results; that potential cash flow, potential returns, and potential appreciation are not guaranteed in any way; adverse tax consequences and that real estate is typically an illiquid investment. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the Confidential Private Placement Memorandum. Please be aware that this material does not replace the PPM.