Though most of the settlement in Alaska is subarctic, the extreme temperatures of America's largest state means relatively few people live in Alaska--less than a million. This means Alaska didn't experience quite the housing boom that parts of the lower 48 states did, so the housing market is somewhat less affected by foreclosures and cascading prices as in other parts of the USA. You might be surprised to find that some regions of Anchorage and Juneau have housing prices above the national average, despite its remote settlements and often harsh weather.
That doesn't mean a little bit of searching won't turn up some inexpensive homes. I also noticed in my study of Alaska's housing market that many of the homes on the market are quite large by housing standards. For instance, I found one 6-bedroom house selling for under $170,000. If you have a large family and you want to live away from most of civilization, Alaska is a good place to start living.
Most of Alaska's settlement in along the coastline in three major regions: the Alaskan Panhandle containing Juneau, the inland region surrounding Alaska's second-largest municipality, Fairbanks, and south-central Alaska, containing Anchorage. Beyond that you'll find smaller towns and villages, and these settlements are going to be the cheapest homes you'll find in Alaska. Here you'll tiny Native American settlements and little else, because Northern Alaska is one of the most remote areas on planet Earth. The remoteness isn't for everybody, when the temperatures get down to dozens of degrees below freezing and the nights sometimes never end. Before you decide to move to these areas, let's find more promising places to live.
Anchorage is the only city in Alaska with a population significantly over 50,000, much less 250,000. Over one-third of the people living in the State of Alaska (710,000) live in Anchorage (260,000), so you'll find the highest property values in this metropolis. Anchorage is found along the south-central coast of Alaska, making it a central access point between the Alaskan Panhandle further south, the Bering Straits coastline further north and west, and the vast inland regions rising up to the mountainous north.
You might expect to find cheap homes in Anchorage, but the average home costs over $222,000, significantly higher than the national average. While housing foreclosures have pushed the housing market down some, Alaska was never going to have the rampant building states like Texas, Florida, and California had, so the market never bottomed-out the way it did in those states. The cheapest house I found among foreclosures was a 3-bedroom, 1-bath home on 36th avenue selling for around $124,000. You can find other houses selling in the $130k to $150k, but nothing like what you'd expect to find in the frozen wastes.
Home buyers will find many more houses up for auction, which tends to be one of the best ways to get into a cheap home. Check the local sheriff's, tax auditor's, and recorder's office for information on upcoming auctions.
If you qualify for HUD homes in Alaska, the prices drop precipitously. I found a $68,000 listing on Reka Drive in Anchorage with an extended listing. The price has recently been reduced, so if this home is still out of your price range, keep checking back to see if the price continues to go down. I also found a brand new $168,000 house with a lottery bidding system. In HUD lotteries, the property is listed on one weekday and bidding stays open for half-a-week to most of a week.
Juneau, with a population just over 30,000, is the state capital of Alaska. Juneau is found in the Alaskan Panhandle, an area of broken coastline in the far south of the state. On a map, the panhandle almost looks like it's part of Western Canada.
Among the cheapest homes on the Juneau buyer's market are two properties selling for $150,000 (John Street) and $157,000 (Mendenhall Loop Road). I found a HUD home selling for $180,000 with the price continuing to drop. This house is found on Nugget Drive.
Fairbanks is the second-largest town in Alaska, with a population just over 35,000 people and a metropolitan population of around $97,000 people. Fairbanks is the only city found in the interior of Alaska and its Tanana Valley is an important agricultural center for Alaska. A significant part of the population of Fairbanks comes from Fort Wainwright and Eielson Air Force Base, which employ roughly one-third of the working people in the city. The cheapest home I found for sale in Fairbanks is a house going for $139,000 on Farewell Avenue.
Wasilla is the 5th-largest community in Alaska, with a population between 7,000 and 8,000 people. Wasilla is part of the Anchorage municipal area, so those living in this community have access to the advantages of a city with over a quarter-million people. Wasilla became famous nationally because Sarah Palin was the mayor of this community before she became Alaska's governor. The cheapest home on the market in Wasilla is a $168,000 house located on Portage Drive. This house was built in 1983 and has 11 rooms, including 6 bedrooms, 3.5 bathrooms, and a two-car garage. One aspect of buying a home in Alaska is you get a good bargain for the price. Imagine what a house that size would cost in California.
Nome is a seaward town of about 3,900 located on the Bering Strait in far northwestern Alaska. Once the largest city in Alaska, its extreme northern location facing the Russian Far East makes Nome a destination for sea fishermen, Native American locals, and people heading to the far northern oilfields. The cheapest home I found in Nome is $120,000, though this house has an extended listing and the price has been reduced once already.