2021 AK real estate peak or getting going?

[Connor Dunham]

Hey everyone, You may have seen me reply on here, but I rarely ask questions. For anyone that follows markets closely, it seems pretty clear to me we are approaching a peak in equities. Many people are not holding dollars and hard assets like real estate and commodities are gaining momentum. With a real estate-centric portfolio, what steps are you taking to prepare for a downturn? For me, I'm optimizing cashflow, locking in mortgage rates, decreasing equities, and increasing commodities. Seems a little high-level for Alaska, but I feel we have a lot of room to grow after 6 years in the gutter. 

[Connor Dunham]

@Chris S. stacking cash. got it. Good luck with your business venture.

@Allen S. I've read the opposite - Cash is trash (especially when the FED goes Burrrr). I am optimistic for Alaska. Net migration is a function of the job market in Alaska compared to the lower 48; we run inverse to the lower 48 in that way. So, you can speculate that this trend will reverse when the lower 48 job market cools off. Another secular shift (which we are seeing) is the rise of remote work. Plenty of people who work in the tech sector are now free to roam. Alaska is not a wide spot in the road or air, but a destination. I expect longer-term furnished to do really well over the next decade for our market. I'm not so much worried about price. It is a function of average/median income for our market and interest rates nationally. I don't expect income to fall for our market, so the only factor of large concern is borrowing rates. I do expect prices to level off or decline as rates go up. We're still relatively cheap compared to the rest of the Westcoast, so I don't expect there to be a huge downside risk.