The median price of single family homes in Flagstaff dropped nearly 18% in February 2009 compared to February 2008. Flagstaff home sales volume was down from 40 houses in February 2008 to only 27 last month. That 27 homes sold matches the number of sales in January 2009 and December 2008. Four of those sales were foreclosures, two were owned by relocation companies at the time of sale, and one was a short sale. In total, over 25% of the houses sold in Flagstaff in February 2009 were distressed properties.
Meanwhile, more homes came on the market, adding a month’s worth of inventory to the Flagstaff single family homes market at this rate of sales. The oversupply of houses for sale is not quite as bad as reported in my preliminary monthly Flagstaff real estate report for February. A few additional sales were added so, instead of the preliminary 22-months’ supply that I reported over the weekend, we “only” have 20.85-months worth of single family homes for sale as of March 5, 2009.
I don’t usually report on average (vs. median) sales prices, but I do track them. Of interest to me this month is that the gap between the median and average home sales price has narrowed substantially. This matches my own experience in working with home buyers in the last month. Homes in the lower price categories ($250,000 and lower) are scarce and move quickly from listing to sale. Homes in the higher prices ranges continue to stack up on the market. Could this be an impact of the $8000 first-time buyer tax credit? Or is it simply reflective of the oversupply of luxury second homes? Probably it’s both.
In addition to the 27 single family home sales, there were 10 other Flagstaff homes sold in February. Three of these sales were Flagstaff condos – developers of apartment-to-condo conversions were (and are) offering substantial incentives to buyers and their real estate agents. Contact Team Heitland at RE/MAX Peak Properties to learn how to get the best buy on a Flagstaff condo.
Three Flagstaff townhomes sold, leaving two years supply on the market as of March 4, 2009. The prices on these three townhome sales ranged from $237,500 to $370,000. None of the townhomes had been foreclosed.
There are fewer manufactured homes on the market in Flagstaff relative to the number of sales than anything else – four sold in February, leaving “only” 13-months supply on the market. The median price was $183,125. Again, there were no foreclosures in this group of Flagstaff homes.
Late March and early April are traditionally a time when more homes are listed in the Flagstaff market. If inventory continues to increase, the law of supply and demand dictates that prices must come down. Unless more buyers decide that now is the time to grab a bargain in Flagstaff homes (and a bargain in home loan rates)…. Stay tuned. | 
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