Flagstaff's Real Estate Prices Hold in October But Supply Builds

While the overall median price of Flagtaff homes continued to fall during October, the price of single family and townhome residences rose slightly compared to third quarter results. The supply of Flagstaff homes available for sale relative to the number of home sales continued to rise, however. For all types of homes with Flagstaff mailing addresses, the median price for the third quarter of 2007 (ending September 30) was $290,000 (353 units sold) and the October median price was $280,000 (96 units sold). For single family, free-standing residences, the median sales price for the 3d quarter of 2007 was $371,000 (198 units) but was up to $382,500 (44 units) at the end of October. Townhome prices held almost even, with the median price for the 3d quarter at $278,750 (46 units) and November’s median price at $281,500 (12 units). (These numbers include only sales reported in the Multiple Listing Service of the Northern Arizona Association of Realtors® and include any units with Flagstaff mailing addresses, whether inside the city limits or not.)

There is nearly 15 months’ supply of single family residences on the market, if the pace of sales were to continue at October’s rate. This should mean substantial bargains will be available for buyers. The townhome market is not as flush with supply as the single family residence market, however, it, too, is definitely a buyers’ market, with over 9 months’ supply of homes at the October rate of sales.

I present statistics for three different slices of the market (overall, single family residences only and townhomes only) because of the difficulty in comparing this year’s market to last on an overall basis. The difficulty in comparison is caused by the entry of apartment conversions – a new housing product – into the Flagstaff market. These apartment/condos are smaller than most anything previously seen in Flagstaff and have been sold in large numbers in 2007 at prices much lower than the lowest price available in recent years for other types of homes. The effect has been to reduce the average and median prices in the Flagstaff market below the prices of two years ago; however, the price per square foot for the typical residence is still higher than in 2005. Whether that price increase can hold in light of the supply of available homes for sale remains to be seen.