With many goods having to be trucked in from "Outside" as Alaskans call the lower 48, and the construction trades commanding high salaries, it's not cheap to build homes in this small metropolis near the center of the state. The median price of homes sold during the fourth quarter was the highest among the 10 most affordable markets and closely tracked the national median.

It's good pay that makes homebuying so affordable here. Fairbanks households earn a median of $78,000, about 21% more than the typical American household.

Much of the local work depends on government with two military bases, Fort Wainwright and Eilson Air Force Base, major contributors, according to Jomo Stewart, with the Fairbanks Economic Development Corporation. The University of Alaska is also a big employer.

Ironically, the price of oil, which Alaska has in abundance, has slowed the local economy.

"Fairbanks runs on oil," said Stewart. "It's used for heating and generating electricity and the rise in the cost of oil has put Fairbanks in an economic bind."