Although residents pay a premium for food and fuel, and especially housing – Sitka is far from the most expensive place to live in Alaska, and in fact lands somewhere in the middle.
But this is cold comfort for Sitkans – and residents of other communities – as Alaska remains near the top of the list of expensive places to live in the country as a whole.
If you spend any time on social media, you’ve probably seen lists of the best places to live, or the best places to retire, and the metrics those surveys use probably differ from those of the Alaska Department of Labor, which relies on cold, hard numbers.
Economically speaking, Alaska is just not that attractive.
The June issue of Alaska Economic Trends, published by the Alaska Department of Labor, reports that Alaska is the fifth-most costly state in the US to live in, behind New York, California, Massachusetts, and Hawaii.
Food, fuel, and transportation are the main culprits, although in Fairbanks the biggest burn – literally – is heating fuel, which is over 100-percent higher than the national average.
Paying $100 for a large bag of groceries is becoming more common in urban Alaska. In Kodiak, almost a twin of Sitka’s across the Gulf, groceries are 53-percent more expensive than the national average.
Kodiak, Fairbanks, Juneau, and Anchorage are the only cities in the state whose data on consumer prices are compiled by the national Council for Community and Economic Research. Folding in data from some of Alaska’s rural areas would skew the graph so far as to make it unusable. A gallon of gas in Galena, for example, was selling for just over $10 this spring.
To learn how the rest of the state stands up, economists turn to a list generated by the Department of Defense, which adjusts military salaries according to the cost of living in communities where personnel are stationed. Wasilla is at the bottom of the list, although it’s still 28-percent more expensive to live there than the national average. Bethel and Cordova are tied at the top, at 46-percent more expensive than the rest of the country. Homer, Kenai, King Salmon, and Valdez are tied for second, at 44-percent more expensive. Sitka, Petersburg, Juneau, Nome, and Wainwright are in third place, at 38-percent more expensive than the rest of the country.
And interestingly, when you subtract the high housing and utility costs, the military – which subsidizes housing – puts Fairbanks near the bottom, at 34-percent above the rest of the nation.
The good news is that inflation is cooling off in Alaska, and some prices are even coming down off their high last year – like meat, poultry, and eggs at the grocery store, and used cars and trucks. Housing is not coming down, though. The average price of a home in Alaska is now over $380,000, an 8-percent jump from last year. In Juneau, that figure is now over $500,000. Sitka’s prices are in that ballpark, although the market is too small to say with any precision. The state does track rents, however, and puts the median cost for a two-bedroom apartment in Sitka at $1,400 – just below Juneau, and above Chugach.
What the state doesn’t measure, though, is the burden created by high housing costs. In April, McKinley Research reported that almost a quarter of Sitka’s homeowners, and half of its renters, pay a third or more of their income on housing costs – and cost-burdening is not unique to Sitka.
So until someone starts factoring in the state’s relatively low taxes, and its superabundance of natural beauty and wild country, Alaska is not going to be topping those lists of desirable places to live on social media. And most residents can probably live with that.