Flagstaff Real Estate Market Update

The following chart shows a snapshot of data downloaded November 2^nd from the Northern Arizona Association of Realtors^® Multiple-Listing-Service for all homes with Flagstaff mailing addresses. There are other homes on the market, and other sales, but the MLS data reflects a substantial part of all the Flagstaff area real estate activity.

The chart above is for all Flagstaff homes: single family, townhomes, condos and manufactured homes. The chart below is for single-family-homes.

Flagstaff single family residences show a slight median price increase from September to October, but also an increase in inventory and a drop in median price from October 2007 of over 14%. The drop in average home price compared to last year demonstrates that the Flagstaff homes that are selling are in the lower price categories.

Here are the October home sales numbers for Flagstaff condos, townhomes and manufactured homes. Note the lower inventory-to-sales ratio (absorption rate) for the condos and townhomes, which have prices significantly lower than single family Flagstaff homes. The Flagstaff manufactured home inventory, on the other hand, has sky-rocketed because of larger downpayment and tighter loan requirements for this category of home.

People often ask me when I think the Flagstaff real estate market will “come back.” First, realize that the market is still there – 68 homes sold in the month of October. This is a great time to be a buyer. Interest rates are low, inventory is high, and home sellers are under pricing pressure. Mortgages are available, and the FHA is in full swing offering loans with 5% down. So, if you are a buyer, the Flagstaff market is not just back, it’s here.

If you are asking me when the volume of sales will increase, my answer is that prices either need to fall further – which I think they will, slightly – or we need to wait until 2010 when the existing inventory levels will be down and demand will increase. Until then, the economy is unlikely to support improved demand, and without that, the home prices are not going up. For more on the economic outlook, see my post about last week’s Flagstaff economic conference.

Team Heitland at RE/MAX Peak Properties is plugging along. The market may have fewer sales, but our share of those sales continues to grow. Thank you for the referrals that make that happen! For buyers hitting this blog as part of an internet search for Flagstaff homes, visit our website and search for all Flagstaff homes listed in the Flagstaff MLS.