Inside Flagstaff, the average price for a "home" is $325,750 over the past 12 months and the median price for a "home" is $299,900. This is for all types of homes. More accurately, a single family home has an average sales price of $408,800 over the past 12 months as opposed to a 2007 average of $435,400. The median single family home price dropped slightly to $357,500 from $375,000. The average townhouse is at $273,750 and a condo is at $171,600. Again, this is for the city of Flagstaff for the past 12 months. Call me to discuss this and other surrounding markets at (928) 679-2132.
Flagstaff and its surrounding communities are still under what many consider a "Buyers Market". By many indicators our market has declined slightly over the last two years. We are seeing slight price decreases in most housing categories, but nothing like what the media is misrepresenting. The biggest decline in average price paid is in condominiums which can be explained by the flood of apartment conversions (3 large complexes) that entered the market in 2006. Also, foreclosures have had an effect on several neighborhoods in which they effect the average price paid.
For buyers looking in the Flagstaff area for a home this all means that there are choices when searching for a home and every once in awhile a "good deal" to be had. That said, we are seeing some individual properties sell for less than market value. So now is a good time to buy.
At a National Association of Realtors Board of Directors meeting that I attended in May, and also at an Arizona Association of Realtors meeting in March, Realtors and real estate economists from across the nation and across Arizona all agreed that our markets have declined nationally, regionally and statewide. This is the "soft landing" that was predicted rather than the balloon burst that some feared. So, we have slowed and we will continue to experience a slight Buyers market. But, there are several factors that are leading to the market we see in the Flagstaff area, which is much STRONGER than most in the U.S.
First, we have a lot of inventory on the market for the greater Flagstaff area. Buyers have choices, especially in the Townhouse and Condominium markets. However, we continue to enjoy low (and falling!) interest rates. After 2001, many investors left the stock and bonds markets for the greener pastures of real estate investing. Many of those investors are now selling or exploring the real estate market. In my work with the National Association of Realtors, I have heard many real estate economists that feel that relatively low interest rates will continue for 5 to 7 more years, barring any unforeseen economic disaster which the U.S. Government is trying to avert at this writing.
Secondly, Northern Arizona is greatly impacted by second home buyers from other areas. I heard an estimate that for 2006, 57% of Buyers in the Flagstaff area were second or vacation home buyers! Buyers come mostly from the greater metro Phoenix area and especially the Scottsdale and Sun City areas. The greatest impact seems to be from the completion a few years ago of the 101 freeway both east and west of Interstate 17. This has made Flagstaff and its surrounding areas 20 minutes to a half hour closer to those trying to escape that blazing Phoenix weather!
Another impact, although a smaller one, is the buyer relocating to Flagstaff for its weather and lifestyle. This is a great place to live. Clean air, good schools, wonderful forests and tons to do. We are not seeing much of an increase in population, so relocating buyers may be replacing those that are moving out of the area.
In my opinion, California has a blown-out-of-proportion impact on home prices here. We do see buyers coming in from California, and many of them over-paying and in cash. However, as a percentage of our market they do not have that big of an impact on demand in Northern Arizona. Scottsdale has a much bigger impact on demand than the entire state of California!
So we seem to be in a more normalized market than what we have seen: A frenzied 2004 and 2005, a somewhat slow, but slightly increasing 2006 and a declining market (slightly) in 2007 and into 2008. 2009 is shaping up to have good activity, high inventory, tentative buyers and deals to be had!
The Crystal Ball: So, what can we expect for 2009? The end of this year should see more of the same that we saw in the start of 2008 - a big inventory of housing product, somewhat sluggish sales, low interest rates and deals to be had. As spring 2009 approaches, look for our market to heat up with both number of listings available for sale and in actual sales. Remember, 2008 is an election year. Look to federal agencies to step in and provide financial institution "bail outs", an increase in aid and activity designed to help the consumer through what is projected by many media outlets to be a national housing/lending crisis. Many of us feel that such negative media attention is leading to a self-fulfilling prophecy. By early 2009 however, markets should begin to stabilize and more "normal" market conditions should return. Along with that, Flagstaff's demand for housing product will begin to gradually rise driven primarily by the financial strength of the second home buyer.
If you are interested in "No Hassle" buying or selling in the Flagstaff, Pinewood, Parks or Williams areas, give us a call at (928) 679-2132 or visit our website at www.GaryNelsonGroup.com. We are a team of two Associate Brokers, a Buyers Specialist, a Transaction Coordinator and a Marketing Coordinator. Between us we have over 50 years of experience in the real estate business. This extensive experience is an invaluable resource to both buyers and sellers. Get the team advantage!
ZIP Codes: 86001, 86002, 86003, 86004, 86011, 86017, 86018, 86046 Approximate Location Boundaries: Flagstaff, Pinewood (Munds Park), Willaims, Parks and all points in between!
Location Characteristics: 7000 feet closer to heaven! Tall pines, open meadows and cool breezes...
About Gary Nelson:
A life-long resident of Flagstaff, Gary Nelson is an Associate Broker at Russ Lyon Realty of Flagstaff and has been in Real Estate since 1994. He has his CRS, GRI, E-Pro and ABR designations. He has served as chair of the Northern Arizona MLS and was President of the Northern Arizona Association of Realtors in 2001. Gary currently serves on the Board of Directors of the National Association of Realtors, the Arizona Association of Realtors and the Northern Arizona Building Association.
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
