Moving to Alaska: Is Living in Alaska Worth the Higher Cost?

Moving to Alaska: Is Living in Alaska Worth the Higher Cost?

Posted 06.07.2011 in Articles by Dan

Over the past 20 years Alaska has seen a steady incline of job and economy growth; a stretch that has only been matched by seven other states. While the national unemployment and economy has struggled over the recent years, Alaska has shown it's ability to withstand the national trends of decline. However, does the open job market and stable state economy outweigh the higher cost of living in Alaska?

Alaska is home to some of the most beautiful landscapes and sceneries in the United States; great mountains with snow caps, great and vast forests, and gorgeous blue lakes cover the Alaskan land. But due to Alaska being far north of the continental United States and having harsh weather conditions, the price of living can be more expensive than many other states.

The first thing to decide when moving to Alaska, is what kind of housing situation you plan on looking for. If you are planning to purchase a home, the prices can vary extremely. For example, if you are moving to Anchorage, are satisfied with commuting to the city and looking to buy a home $300,000 can buy a 3,000-square-foot home on an acre of land. Larger plots of land can range in the million dollar range in Alaska, boasting incredible views and a lot more square-footage.

If your move may be more temporary, renting could be your answer. Renting within any of the major Alaskan cities can cut prices in commute cost while being cheaper than renting in another major market. A renting budget of $1,800 - $2,400 can afford a spacious three of four-bedroom house while a three-bedroom condo is on average $1,350 a month to rent.

One of the main costs that come with housing however, is the utility cost. Heating is a big cost in Alaskan, with the majority of utilities being spent on heating oil and energy. Heating needs to be a factor included in the price when budgeting your housing budget in Alaska because even though the bottom line for rent may be affordable, make sure to calculate average heating costs. Heating an 1,800 square-foot home could cost a family up to $6,000 over a winter (Oct.-Mar.).

To help combat the high heating costs, Alaska offers relief for residents in the form of the Alaska Permanent Fund, or Permanent Fund Dividend. The Alaska Permanent Fund is part of the state constitution that pays Alaskan residents a rebate based off of the state revenue. The PDF rebate can range anywhere from $800 to as much as $2,069.

As far as employment in the state of Alaska, the unemployment rate has been under the national average. In August of 2012, the national unemployment rate was at 8.6% while Alaska was at an unemployment rate of 7.8%, and in Anchorage the unemployment rate was at a low 6.6% in the same month. Main areas for jobs in Alaska center around the military, lumber, construction, fishing, energy, and oil, allowing for Alaska to boast an average salary range of over forty-two thousand to nearly ninety-five thousand.

Alaska is also special in the amount of daylight it receives throughout the year. Because of how far north Alaska is, most parts can receive nearly round-the-clock daylight during the summer. This may require a big adjustment in your body clock, but it does give you more hours in the day.

The price of goods have been more expensive in Alaska than the continental United States on average. For groceries and produce, Alaskans tend to have to pay roughly 10% higher than in other states. Groceries in Alaska are also more expensive than the average price for the US. In 2011, the Department of Labor calculated that grocery costs in Alaska only trailed New York City, NY and Honolulu, HI as the most expensive.

With shopping online, shipping fees are specific to Alaska versus shipping to any of the continental states. Particularly with Amazon.com, Alaska not only has a higher shipping rate, but some items are restricted from being shipped to Alaska. Shipping prices for Alaska are on average of four to five dollars more than the average Amazon shipping price, but then there is also increase in “per item” fee of anywhere from 20 cents to double the “per item” shipping cost.

While Alaska is home to stable economy, great job opportunities, and beautiful landscapes and views, it all comes with a price: greater fuel prices, higher price of goods, harsh weather conditions, and an increased difficulty to buy certain items. If you are considering moving or have the opportunity to move to Alaska be sure to evaluate all the potential costs, research the job and housing market in the probable destination, and fully determine if venturing north is the best move.

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