Home prices in Flagstaff have dropped, but so far not as far as in Phoenix according to Flagstaff’s local paper, the Arizona Daily Sun, on its front page today. Not news. The Daily Sun article reports that sales are easier to make if your home is priced under $350,000, but the numbers they give still make it a “buyers’ market.” Over six months’ supply is a buyers' market and the under $350,000 category is reported as 7 months supply. The over $350,000 market is reported at 17 months supply. Also, not news. After reading this information in the paper this morning, I ran some numbers on my own, using the Northern Arizona Association of Realtors® Multiple-Listing-Service. I found there were 119 homes actively for sale in the over one-million dollar category. Only two sold in the last thirty days. That means there is nearly a five-year supply of million-dollar-plus Flagstaff homes. In the $500,000 to $999,000 category, there are 259 Flagstaff homes for sale, and 14 sold in the last month. Yes, I checked, none of them were listed at over $1 million before they sold. That’s an 18 month supply – still pretty bleak. My conclusion: We won’t be seeing any builders doing “spec” homes in the over $500,000 range for a long time. Surprised? The Daily Sun seems to report statistics based only on homes within the city limits of Flagstaff. I do statistics based upon Flagstaff mailing addresses so that my numbers include all of what is generally thought of as the greater Flagstaff area, including, for example, Doney Park, Timberline, Fort Valley, and Kachina. Looking at those numbers for August, the median sales price was $300,000 instead of $340,000 reported by the Sun for the privilege of living in the City. At the peak of the market, the difference in the rural area prices and the city prices narrowed to nearly zero. With higher gas prices and more options within the City, that has definitely changed. Right now, if you want a bargain, look in Doney Park or in Kachina if trees are more to your taste than views. Another Flagstaff Realtor® was quoted in the Sun as saying, “I wouldn’t be surprised if prices go into double-digit drops.” Neither would I, Steve, but Flagstaff’s home price drop won’t be caused by a housing crisis, but because of the other factors discussed onlyy incidentally in the Sun article – like the debt crisis, for one. And what about the energy crisis – that one was overlooked in the article, I guess, because it’s last week’s “news.” The Sun reports that home prices are not the only thing that have fallen in Flagstaff – restaurant sales, hotels and campground occupancy, auto sales, and, of course, construction are down from 2007. (Anecdotally, though, I can say that restaurant prices are up as the price of food is up for restaurant owners as it is for all of us.) Still, the changes in Flagstaff are infintessimal compared to other parts of the U.S. The major, national economic upheaval is affecting Flagstaff, and it’s hitting some people very hard. But overall, Flagstaff has so far been insulated from the worst effects of the economic crisis facing the country -- so far. The problem did not start in Flagstaff and it can’t be cured in Flagstaff, in my opinion. We can do our part by improving our educational system – that was the subject of today’s Daily Sun editorial, for which I congratulate the Editorial Board. |
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