The real estate news blurb below appeared in my inbox from Realtor® Magazine yesterday. One factor not mentioned is that home prices in southern California, and San Diego County in particular, have fallen far enough that the median home price is now “affordable” compared to the typical area household income. That hasn’t happened yet in the Flagstaff real estate market. Nor have we had the rate of foreclosures here in Flagstaff that has occurred in southern California.
Does that mean that Flagstaff’s market still has a ways to fall? Or that Flagstaff’s market is different and our prices will never get to the "affordable" level measured by median local family income? My opinion is that both are true. The fall in prices in Flagstaff is insulated by the fact that Flagstaff homebuyers are often second home buyers who are using discretionary income to enjoy the beauties of Flagstaff. Also, Flagstaff is a popular retirement community for active, baby-boomer retirees. These Flagstaff retirees are not expecting their current income to cover their home costs – they are covering their home purchase costs (either mortgage or cash) with savings and investments. So, looking to other real estate markets provides some guidance for the future for Flagstaff real estate, but don’t expect news such as this to be a clear prediction of where we are going here:
"Home sales in southern California rose 65 percent in September compared to the same month a year ago.
"A total of 20,497 new and existing houses and condominiums sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino, and Orange counties. It was the largest increase MDA DataQuick has recorded in the 20 years it has been keeping records, the company said Monday.
"The increase was fueled by foreclosures, which drove down prices, MDA DataQuick said, pushing the median price down 33 percent from a year earlier to $308,500.
"Sales so far this month appear to have been slowed by bad financial news, says Andrew LePage, an analyst with MDA DataQuick."
--- Realtor® Magazine, October 21, 2008
So even those markets, like Southern California, that have shown increased volume are stagnating in the face of the larger economic crisis. We've certainly seen the impact of the credit crisis and consumer confidence drop in the Flagstaff real estate market in the last few weeks. Still, Flagstaff home buyers and sellers are doing business.
If you need or want a Flagstaff home, it can and should be done now! Contact our expert team of Flagstaff real estate agents to help you find, price, negotiate, inspect, and close the Flagstaff home that you want. | 
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