Inside Flagstaff, the average price for a "home" is $301,533 so far in 2009 and the median price for a "home" is $275,000. This is for all types of homes. More accurately, a single family home has an average sales price of $367,580 so far in 2009 as opposed to a our all-time high, which was the 2006 average of $452,200. The median single family home price dropped slightly to $331,000 from $375,000 at the end of last year. The average townhouse is at $254,000 and a condo is at $162,680. Again, this is for the city of Flagstaff for 2009.
Flagstaff and its surrounding communities are still under what many consider a "Buyers Market". By many indicators our market has declined over the last two years. We are seeing slight to moderate 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 affect 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 continued to decline nationally, regionally and statewide. 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 (but fluctuating!) 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 2008. The tail end of 2008 and early 2009 had the biggest drop. 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 the rest 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 fall 2009 approaches, look for our market to continue rebounding nicely with both number of listings available for sale and in actual sales. Remember, 2008 was an election year. 2009 is different. Many of us feel that such negative media attention last year lead to a self-fulfilling prophecy. Now, the media is flat out saying we are past the bottom. By late 2009, 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) 853-2308 or visit our website at www.GaryNelsonGroup.com. We are a team of an Associate Broker, a Buyers Specialist, a Transaction Coordinator and a Marketing Coordinator. Between us we have over 40 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 Realty Executivesof 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.
