Flagstaff’s real estate market is making some moves!  For months, home prices were stuck with median home prices in the mid-three-hundred-thousand dollar range. All of that changed in April, with the median price dropping to $322,000 for a single family home and to $290,000 for all home types (including manufactured, townhomes and condos as well as single family homes). Like magic, sales jumped from 33 single family homes sold in March to 42 in April. More significantly, there are 77 single-family-residences under contract waiting to close as of May 4, 2008. The over-supply of homes dropped from 19-months’ supply at the end of March to 16-months’ supply at the end of April. It’s still a buyers’ market, but a shift has occurred.

How long the downward price trend will continue is anyone’s guess, but it’s not likely to go as far as it has in other parts of the country because of our land shortage and because new home construction has essentially shut down in Flagstaff since 2006. The drop in over-supply from 19-months in March to 16-months in April reflects this supply crunch.

Are Flagstaff homes affordable? As of May 4, 2008, there were 322 Flagstaff homes for sale on the Flagstaff MLS at a list price of $250,000 or less. Your first home does not need to be your dream home. In fact, it should not be. The idea of owning a home is to build equity and move up. I’m on my fourth home. Once I was established in the dream home, I could move to investment properties. The foundation for all of this is that first home. I bought mine in 1978. Interest rates were over 8% and the economy was in the doldrums with gas prices at all time highs and the President on TV in a sweater to encourage conservation. Now, with interest rates under 6%, it is a great time for people who want to live out their lives in this beautiful mountain town to get into the market and buy their first home.

All of these numbers are based upon statistics complied from reported listings and sales on the Northern Arizona Multiple-Listing-Service, which may not include all homes on the market, but includes a significant number of them. The homes included in this sample are all those with Flagstaff mailing addresses, whether they are within the Flagstaff city limits or not, and therefore represents what is generally thought of as the Flagstaff area of Northern Arizona.

For Flagstaff real estate market analysis keyed to your special financial situation and housing needs, contact Team Heitland at RE/MAX Peak Properties.