Who Is Buying Flagstaff Homes?

Who’s buying Flagstaff real estate in the current market? As of Monday morning, exactly 100 homes had sold and closed in Flagstaff so far in 2008, according to the Northern Arizona Association of Realtors^® Multiple Listing Service. Of course, I can’t know who all of those 100 buyers are. Homebuyers who have purchased in transactions with Team Heitland so far in 2008 included four previous Flagstaff homeowners who are “moving up” or changing neighborhoods, one new staff member at Flagstaff Medical Center, one federal Park Service employee, one Northern Arizona University staff member and one NAU dean.

Flagstaff home sellers sometimes ask me who I think the buyer of their home will be. My answer is that we can never know. The goal in marketing a home is to expose the features of the home to as many potential buyers as possible, and let the home-searching buyer choose the home! The buyer of a Flagstaff home could be anyone.

In addition to wide exposure when marketing a home, I try to present the home in a number of different ways, changing the emphasis from one set of features to another in an effort to appeal to a variety of buyer prospects. This is why I try to read widely, follow the demographics of Flagstaff, and attend several seminars per year.

In the book that I recently read and discussed in an earlier blog, Microtrends, a number of potential Flagstaff home buyers were profiled.  Of course, that’s not how the author discussed these population developments. In fact, Mark Penn didn’t mention Flagstaff at all, and only infrequently mentioned home buying. His central thesis is that society is changing in ways that few people appreciate or understand because the number of people involved is relatively small, yet even if only one-percent of the total population is involved in the trend, the total number of people is so great that the trend will have a huge impact on the economy, or society. When 1% of the U.S. population is doing something, Penn qualifies that something as a "microtrend."

Here are some things people may never think about from Penn’s book:

• While U.S. population growth as slowed dramatically since 1970, the number of “household formations” has exploded. The typical homebuyer is no longer married with kids. Indeed, fewer than 25% of all U.S. households are married with kids.
• Meanwhile, the percentage of U.S. homes where only one person lives alone grew to 26% in 2003, from just 17% in 1970.  Wonder who is buying all those one-bedroom condos in Flagstaff? Wonder no more.
• Many married couples have two homes and are what Penn calls commuter couples – they live together only part-time. Commuter couples make up at least 1% of the U.S. population.
• More than 1% of the U.S. population is extreme commuters – people who are living over 90 minutes from where they work and making a round trip of 3 or more hours per work day. Anyone wanting to live in Flagstaff, but work in Phoenix would fall in this category.
• Lots more single women are buying homes than a few decades ago. More women survive to adulthood than men --- there are too few men to go around and single women are not willing to deprive themselves of the advantages of homeownership just because they are not married.
• More than 1% of the U.S. population works entirely from a home office. The primary concern of home office workers in buying a home is space to work and the availability of a high-speed internet connection.
• International home buyers: these are investors from other countries. With the dollar at such a low valuation relative to the currencies of most countries, there are more and more people from other countries buying in the U.S. There are fewer such people buying in Flagstaff than, say Manhattan, but Team Heitland has represented a few in the last few years.
• Another "microtrend" is what Penn calls the working retireds. These are individuals past 65 who continue working because 65 is no longer a retirement age but is the new middle age. Many of these people are searching for a different career, or they become home office workers in a geographic location, like Flagstaff, that is more desirable than the tough urban environments they have lived in earlier in their lives.

One group that has been prominent in prior years is not on this list: Second homeowners. Second homeowners have been more than a "microtrend" for Flagstaff (Penn identifies them as a national "microtrend" in his book.) The downturn of the Phoenix real estate market, where most Flagstaff vacation homeowners come from, has reduced the number of Phoenicians who feel they can afford a Flagstaff second home.

So, who will buy a Flagstaff home? It could be any of these, and many more who are not part of "microtrends." If you want to sell, the job of your real estate agent should be to market your home to them all. If you are among those looking for a Flagstaff home, the job of your real estate agent should be to find you the right home for whatever your trend is.