THE OUTLOOK FOR THE REGIONAL ECONOMY IN 2016 WAS “FLAT TO DECLINING”…AND NOW??
For years, in-state economists have charted the almost meteoric rise of population and the economic sectors of Anchorage and the Mat-Su valley, while Southeast Alaska’s economy was described just five years ago as “flat to declining.” This is because the oil industry was the main driver of population and growth in those areas, leaving southeast behind, not benefiting from the growth of that sector and all that grows with it.
2021 and beyond, however has an altogether different frame in Southeast, as Fisheries and Timber continue to struggle on the heels of a Tourism industry bust that may take more than one season to recover. Raincoast Data, the only independent source of economic data on the region, reported at a recent Southeast Conference meeting that from April through July 2020, the region lost 7,000 jobs across every sector, with Tourism particularly devastated. In fact, Southeast lost 17% of its jobs due to the pandemic, and is the most economically impacted region in the state. Bright spots continue to be the mining industry, and the potential for government spending to remain as a stabilizing factor–at least for Juneau.
DEBATE HEATS UP OVER TAXPAYER OBJECTIONS TO JUNEAU’S HIGHER PROPERTY TAX ASSESSMENTS It looks like there may be a legal complaint filed by dozens of owners of Commercial property in Juneau as they continue to call out the Borough Assessor and the Finance Department for unfairly increasing assessments on commercial land by up to 50% in some cases over 2020 assessments. Those objecting to the new tax assessments cry foul that the CBJ simply “does not have enough data” to make those radical upward adjustments, while the Assessor and the Finance Department have defended their stance that their “analysis” has made “no global errors.” Whether or not the legal department will be able to defend the CBJ action remains unclear. Some call for a third party independent review of the new assessments. It will be up to the Assembly to oversee the resolution of the issue.
VOLUME OF SINGLE FAMILY HOMES ON THE MARKET DROPS SIGNIFICANTLY. Independent sources tell us that less than four dozen homes are available now for purchase in Juneau. This comes as a wave of buying and selling activity has peaked in reaction to historically low interest rates below 3% for 30-year fixed loans and refinancing of existing debt. The shortage is expected to strain Residential Brokerages in Juneau that now employ over 90 agents. One lender commented: “as long as the supply of new listings continues—and the sales are brisk, there should be enough sales to go around. But it remains to be seen if there will be enough inventory to keep that number of agents working full time.” Meanwhile, new construction starts are showing healthy increases as long as the availability of developable land can be sustained.
THE OFFICE MARKET IN 2022 WILL BE SLOW TO RECOVER FROM ITS CURRENT SLUMP. With many corporate and government employees still working from home, it will be difficult to project any near-term uptick in demand for office space in Juneau. This is because absorption of new space traditionally depends on a strong regional economy, and the in-migration of new business to Juneau. That trend has effectively been frozen-in-time since 2019. However, scores of non-profit, health care providers, and tribal organizations are experiencing exponential growth as a result of the CARES act, and successful initiatives to secure Federal and private funding sources.