The biggest mystery of the 2017 Sitka Economic Summit: Half of all home buyers in 2016 paid cash. (Flickr photo/David W. Hogg)
Sitka’s economy is trending upward on paper, but peoples’ perceptions may be a more accurate way to gauge the community’s economic health.
The Sitka Economic Development Association held its annual Economic Summit this week (4-13-17), and as usual, the data were not necessarily clear.
The summit featured brief presentations from seven sectors of the local economy: education, municipal government, health care, business entrepreneurship, fisheries, construction, and tourism. SEDA’s executive director, Garry White, gave an eighth presentation on the labor and real estate markets in Sitka.
The numbers alone don’t reveal much. For example, average per capita net earnings ($42,079) in Sitka have ticked downward over the last three years, but the average monthly wage ($3,719) is up slightly, as is the average number of people employed each month (4,894).
Some of these discrepancies might just be a matter of the data source, whether the US Census Bureau, or the state Department of Labor, explained White.
But other numbers were a mystery. White cited the over 200 real estate transactions (not including vacant lots or islands) in Sitka in 2016 — twice the number of transactions in 2015 — and almost half with no traditional form of financing.
“That is a crazy number to me, and I have not been able to dig in to find out what is going on there. But we had a lot of housing transfers last year, and a lot of them were done in cash.”
Side-by-side listings in Realtor.com for Sitka: A $3.5 million island home and a $67,000 trailer. But the market lacks “bread-and-butter” homes in the $350,000-range. “We sold ’em all,” said realtor Travis Vaughan, which suggests there is no mass exodus of families from the community.
No one on the panel could offer a firm answer to the sudden spike in cash real estate transactions, except perhaps wealthy, out-of-state buyers.
But there was anecdotal evidence to suggest that all the home sales didn’t mean that Sitkans themselves were packing up and moving out.
Chamber of Commerce president Travis Vaughan, who hosted the summit, is a real estate broker.
“I don’t see it in the market. I don’t see a mass exodus of Sitka. If you look at the bread-and-butter, the $350,000 price range for a single family home — we don’t have a lot for sale right now, and haven’t for some time. We sold it all. And if there was a mass exodus from Sitka, we’d b e ordering listing signs left and right. You’re not seeing it. I manage 70 rentals. I have zero vacancies. Not one or two. Zero.”
And the construction business, according to panelist Dean Goodwin, with Spenard Builders’ Supply, was doing pretty well.
“There are 23 locations of Spenards, including some truss plants and millwork plants, but of the 23 locations we’re probably doing better than most. And it probably has something to do with our captive audience. That does help.”
Not every hard number was difficult to reconcile. Sitka is getting older. There are 600 fewer students enrolled in the school district now (1,276) than when the APC Mill closed in 1993 (1,800).
White used this data to generate some brainstorming.
“We’re losing workforce aged residents; we’re becoming an aging population. And as community planners look at this, how are these trends going to affect our housing needs, our health care needs, city services, retail purchases. This is all going to affect what’s moving on as we see this aging population coming on.”
In one respect, an aging population might be viewed as an economic opportunity, with its specialized needs, and stable pension or retirement income.
But SEARHC Hospital administrator Jeff Prater wasn’t so sure. He was the health care panelist, and he saw a potential crisis developing for some of Sitka’s elderly.
“We have a population of folks who have no other resources for health care. The income that is coming in isn’t enough to cover Medicare Part B or Part D. Those are things that we’re just starting to see. And on top of that, what’s starting to worry us, is that we fill up pretty fast with folks who have what we call a ‘disposition scenario’ where there’s no place for them to go. In other words, they’re there, they’ve exceeded an inpatient stay, if you will. Even if they went to a swing bed, a step-down type of care, and they’ve exceeded that criteria, and we work really hard to figure out where someone can go afterwards.”
Prater called it a “placement issue,” and said that SEARHC is seeing fewer families step up to care for elders, as was more common in the past. And the state was struggling to fund the Pioneer Homes.
Audience member Pat Alexander suggested revising the elder care model.
“There will have to be a paradigm shift. And it might be to small group homes like they have for foster care, only for high-functioning elders. We can’t afford the big nursing homes and the Pioneer Homes and things like that. There needs to be a new idea of care for those folks, because the nuclear family has been demolished.”
After two hours of discussion, the economic summit wrapped up with no firm conclusions about the health of Sitka’s economy. Fortress of the Bear co-director Evy Kinnear suggested that Sitka should develop its human capital.
“We have a resource of people here, and ideas, and knowledge. And it’s just sitting, like a lump.”
Kinnear thought that people in the nonprofit sector could collaborate and support each other on issues like obtaining health insurance, and she herself was open to helping the next generation start businesses.
