Alaska, also known as the Last Frontier, is on many Americans’ travel bucket list. If you visit Alaska and fall in love with it, you may decide you want to move to there. While Alaska famously offers an annual check to each of the state’s residents, the somewhat high cost of living may offset this perk. Despite some of its more exorbitant costs, there are no state income or sales taxes.
Housing Costs in Alaska
In general, homes cost a little more in Alaska than the rest of the U.S. According to NeighborhoodScout, the state median home value is $265,385. Furthermore, 71.8% of the homes in Alaska fall somewhere between $108,722 and $435,285 in value. Some of the bigger cities have higher median values, as Anchorage and Juneau stand at $303,601 and $364,295, respectively.
Perhaps the most disturbing trend regarding the Alaskan home market is its lack of solid appreciation rates. From 2013 to 2018, NeighborhoodScout data shows homes have averaged a 2.13% appreciation rate annually. While that might seem good, consider that California and Oregon have seen 7.55% and 8.61% appreciation rates, respectively, over that same period of time.
As far as rent goes, Alaska is ever so slightly cheaper than the U.S. as a whole. According to Apartment List’s 2019 report, the median rent for a studio and one bedroom apartment in Alaska is $17 and $21 cheaper than the national median, respectively. The state is mostly made up of homeowners, though.
A 2017 cost of living study by the Anchorage Economic Development Corporation shows that overall monthly utility costs in Alaska are quite high. In fact, natural gas and electricity bills are 33% higher than the national average in Alaska.
To further illustrate this, according to the U.S. Energy Information Administration (EIA), the average monthly electricity bill for Alaska residents was $127.83 in 2017. That’s just over $16 higher than the national average of $111.67.
Alaskans have access to a lot of great local food items. King crab, Copper River red salmon and Kachemak Bay oysters are true Alaskan delicacies. In southern Alaska, fertile land and abundant summer sunlight produce great local produce. Some Alaskans supplement their food supply by fishing, hunting and picking berries themselves.
Unless you fully embrace the “subsistence” way of life, you’ll end up buying some food at the grocery store. In Alaska’s case, food needs to travel far distances to get there. The same goes for the food served in restaurants.
As a result, food prices in Alaska are high. In Anchorage, the recommended minimum amount of money spent on food for one person is $451.71, according to Numbeo.com data from April 2019. Compare this to the national average of $323.72, and you can see how food can get pricey in the northernmost state.
Transportation works a little differently in the largest state in the Union. To get around, driving is essentially a necessity. There are no subway systems, and most towns don’t have a bus option either.
According to GasBuddy, the average price of a gallon of gas in Alaska is $3.36. That’s the sixth-highest average price in the nation. On the upside, an Insure.com report from 2019 shows that Alaska has a $1,183 average annual car insurance premium. This compares favorably to the $1,457 national average.
There are plenty of places in Alaska that you cannot get to via a road. To make your way there, you might have to take a boat or a small plane. Even Juneau, Alaska’s capital, is only accessible by plane or ferry.
Alaskans pay a lot for healthcare. According to a 2016 report from the Health Care Cost Institute, the overall healthcare prices in the Anchorage metro area are an astounding 82% higher than the national median. To make matters worse, Alaska private company employees contribute $99 more than the national average for single coverage healthcare, according to a 2017 report from the Agency for Healthcare Research and Quality.
Alaska has no state income tax. It doesn’t have a state sales tax, either, though some cities impose their own sales taxes up to 7.50%. The average effective property tax rate in Alaska is 1.19%, which is coincidentally the same as the national average.
Miscellaneous Cost of Living Facts
So how does the state make money if taxes are low? Resource-rich Alaska gets money for its oil wealth. Some of that money was put into a permanent fund that accumulates value on the stock market. This is called the Alaska Permanent Fund.
Every year, the state distributes some of the fund’s earnings to each Alaskan in the form of a check. Based on data from the Alaska Department of Revenue, the payout was $1,100 in 2017. The table below shows how these payouts evolved from 1994 to 2014.
Next Steps for Your Move to Alaska
- If you’ll be starting a new job, your paycheck may end up looking quite different than it does now. Try using our Alaska paycheck calculator to estimate what your new take-home pay will be in “The Last Frontier.”
- Financial advisors can be a big help when you’re dealing with the financial stresses of moving to a new state. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now. You can also check out our listing of the top financial advisors in Anchorage, Alaska.
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