After an upward price blip last month, the median price of Flagstaff single-family homes sold in October 2009 fell to $317,500. That’s down 3.2% from October 2008. Looking behind these seemingly benign numbers, you’ll find that much larger homes are selling for much lower prices – the average price per square foot of a Flagstaff home sold in October 2009 was $135. Consider that at the peak of the market, it was hard to find a home below $225 per square foot.
The pace of sales remained steady – 71 single-family Flagstaff homes were sold in October (compared with 67 in September, 67 in August and 73 in July). This is a better rate of sale than during the winter last year, but still is only about 60% during the summer months of 2005. The number of Flagstaff homes for sale dropped about 10% over the course of the month, but Flagstaff is still faced with an 8.5-month supply of homes as we go into a winter where many more foreclosed home may hit the market.
The Flagstaff townhome median price was down only about 1% from October’s median price last year, but last October was when townhome prices finally made a significant drop. The median price was $215,000 last month and we have over 11 months’ supply of Flagstaff townhomes. Some builders’ townhome inventory began to hit the foreclosure sales lists in the last couple of weeks.
The outlook for the winter in the Flagstaff real estate market depends a great deal on what the banks that are holding unsold foreclosed homes decide to do – keep trickling out the inventory or clear their books. The former seems most likely. Short sales in Flagstaff are saving the banks from building inventory – as well as saving homeowners from the credit-rating hit a foreclosure takes (although a short sale also takes a toll). The extension and expansion of the homebuyer tax credit may continue to provide some cushion to the market.
Overall, we’re likely to see some more home price depreciation, but not has much as we’ve seen thus far in Flagstaff. The climb back up will be long and slow, according to economists at the NAU/Chase Economic Conference which I attended this week. Look for increased volume of sales in 2012, with prices only slightly up then, according to these economists. I tend to agree.
Note: All numbers reported here are based on sales of homes with Flagstaff mailing addresses, whether in the city of Flagstaff or the surrounding rural-suburban areas. The reported data comes from information as reported to the Northern Arizona Association of Realtors® and is deemed reliable for sales reported to the association, but is not guaranteed and does not include all sales in the market area.
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