Why This Flagstaff Market Report Is Good News

202872 Resource 178435 178982 178982 1209926439023 1209935386425 Controlled Flagstaff Real Estate Market Report

Good News for Home Buyers (and Sellers) in Flagstaff

Flagstaff’s real estate market is making some moves!  For months, <a title="Table showing Flagstaff home prices Oct 2007 - March 2008" href="public/blog/178435" target="_blank">home prices were stuck with median home prices in the mid-three-hundred-thousand dollar range</a>. All of that changed in April, with the median price dropping to $322,000 for a single family home and to $290,000 for all home types (including manufactured, townhomes and condos as well as single family homes). Like magic, sales jumped from 33 single family homes sold in March to 42 in April. More significantly, there are 77 single-family-residences under contract waiting to close as of May 4, 2008. The over-supply of homes dropped from 19-months’ supply at the end of March to 16-months’ supply at the end of April. It’s still a buyers’ market, but a shift has occurred. How long the downward price trend will continue is anyone’s guess, but it’s not likely to go as far as it has in other parts of the country because of our land shortage and because <a title="New home construction stats first quarter" href="public/item/201886" target="_blank">new home construction has essentially shut down in Flagstaff since 2006</a>. The drop in over-supply from 19-months in March to 16-months in April reflects this supply crunch. Are Flagstaff homes affordable? As of May 4, 2008, there were 322 Flagstaff homes for sale on the <a title="Search the Flagstaff MLS" href="http://www.bestflagstaffhomes.com/bin/web/real_estate/AR49005/ACTIVATE_FRAMES/SEARCH_MLS/Flagstaff/1209652599.html" target="_blank">Flagstaff MLS</a> at a list price of $250,000 or less. Your first home does not need to be your dream home. In fact, it should not be. The idea of owning a home is to build equity and move up. I’m on my fourth home. Once I was established in the dream home, I could move to investment properties. The foundation for all of this is that first home. I bought mine in 1978. Interest rates were over 8% and the economy was in the doldrums with gas prices at all time highs and the President on TV in a sweater to encourage conservation. Now, with interest rates under 6%, it is a great time for people who want to live out their lives in this beautiful mountain town to get into the market and buy their first home. All of these numbers are based upon statistics complied from reported listings and sales on the Northern Arizona Multiple-Listing-Service, which may not include all homes on the market, but includes a significant number of them. The homes included in this sample are all those with Flagstaff mailing addresses, whether they are within the Flagstaff city limits or not, and therefore represents what is generally thought of as the Flagstaff area of Northern Arizona.For Flagstaff real estate market analysis keyed to your special financial situation and housing needs, contact <a title="Flagstaff Real Estate Agents" href="http://www.bestflagstaffhomes.com/bin/web/real_estate/AR49005/EXTRA2/Flagstaff/1209675323.html?inwindow=1" target="_blank">Team Heitland at RE/MAX Peak Properties.</a> 9 application/xml false affordable homes in Flagstaff Flagstaff home prices Flagstaff home sales Flagstaff homes Flagstaff homes for sale Flagstaff MLS Flagstaff new construction Flagstaff real estate market Flagstaff single family homes Why This Flagstaff Market Report Is Good News Falling home prices means the market is unstuck http://blog.bestflagstaffhomes.com/public/item/202441 Flagstaff Market Report for 1st Quarter 2008 Here is the Flagstaff market report for this time last month http://blog.bestflagstaffhomes.com/public/blog/178435 Is 2008 the Year You Will Wish You Had Purchased Your Flagstaff Home? Hindsight is often filled with regret for real estate investors http://blog.bestflagstaffhomes.com/public/item/201418 Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648) 127.0.0.1 127.0.0.1 aheitland 24.121.32.9 false true false false true 178975 false false true false false false true 202913 Resource 178975 173239 178982 1210003238615 1210043708302 Controlled Flagstaff homes affordable? Well, they're certainly overpriced.

Flagstaff homes are consistently about 20 percent overpriced at present.  We've been looking to find a home here for over a month, now.  Prices have dropped slightly, but still all of the homes we've liked so far we've had to pass up because they are so obscenely overpriced.  We sold our house in the Washington, DC, area for a very good price before moving here (we got lucky), yet we cannot afford a comparable house in Flagstaff.  When Flagstaff prices drop another 20 percent, Flagstaff will be somewhat competitive again.  Until then, we're sitting on our money and waiting.  I suspect we're not the only ones. 10 application/xml false Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648) 127.0.0.1 127.0.0.1 aheitland 24.121.32.9 false true false false true 203043 Resource 178975 178982 178982 1210043564416 1210084129926 Controlled Response to "Stunned"

Interesting assertion -- and comparison to D.C.

I'm not at all familiar with the D.C. market, but I'm stunned that it would not be more expensive than Flagstaff. Were you commuting from rural VA or Maryland? What do you base your "20%" on? I would say it's fairly safe to assume prices will not begin to go up again until 2009, so sitting for now is probably ok; however, I do not expect a 20% drop over the next year. Meanwhile, you lose the tax benefits of home ownership -- if you have income to offset those available deductions. I suggest you find a real estate agent who is expert in the Flagstaff market to assist you in evaluating our market relative to your needs. Ann 10 application/xml false benefits of home ownership tax benefits of home ownership Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648) 127.0.0.1 127.0.0.1 aheitland 24.121.32.9 false true false false true 203069 Resource 178975 173239 178982 1210087724823 1212847722780 Controlled about the "20%"

Thanks for your comments.  You folks are an invaluable real estate resource.  The 20 percent I claimed is, as you probably have guessed, largely a WAG and based mostly on what it appears our house in DC would be selling for here.  We lived in Wheaton, MD, just a few blocks north of the Kensington border and two miles north of the DC border.  Kensington, being the first non-multi-millionaire neighborhood north of Chevy Chase, is highly desirable, so we benefited from a great location and also a bit from that association.  Between that, excellent staging on our part, a very savvy real estate agent, and a buyer who absolutely wanted our house no matter what, we got our asking price with no strings attached, which was about $20k more than we were expecting to settle for based on comps.  We sold for $342k.  That very same house here would *easily* list for $425k.  Probably more, as the (1950s) construction was of notably higher quality than that of the two dozen (1970s-1980s) houses we've seen here.  (This is not a knock of Flagstaff at all -- it's just the way it is everywhere: newer construction is, much of the time, flimsy and cheap compared to older construction.  One could argue that the older stuff was unnecessarily sturdy, and builders got smarter over time.)  Anyway, that's what the 20% guess is based on.  The real number may be 15%, or maybe 25%, but probably not: 20% seems the most likely.  And, yes, surprising as it sounds, housing here in Flagstaff is uniformly substantially higher than in most areas in the DC metro area.  If we had to buy our house in Maryland at the price we sold it for, we could, according to our mortgage lender, handily afford that.  We can *not* afford that same house here, by at least $50k, and we could sell it here for around $80k more than we got for it in DC. Amazing, isn't it?  Nobody was more shocked than us.  My DC coworkers are equally shocked, since before the housing balloon anybody who got transfered to Flagstaff (like I just did) made out like bandits.  Things have certainly changed, and not to anybody's benefit as far as I can tell.  It won't be "normal" again until housing prices fall to rejoin the normal inflation track that housing seems to have always followed before this obscene 2004-2006 balloon. 10 application/xml false Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.9b5) Gecko/2008032620 Firefox/3.0b5 127.0.0.1 127.0.0.1 24.121.188.97 false true false false true 178435 blog blogsite/BestFlagstaffHomes/web