Flagstaff Real Estate Market Report
The median sales price moved up slightly, from $293,000 to $307,000. (These numbers include all types of units - single family, townhomes, condos and manufactured homes.) Wait! Didn't I just say that prices are falling? Yes, the median price of homes sold rose in June compared to May, but the price per square foot is down. In other words, people are getting larger homes for the price they paid last month and last year for comparably smaller homes. Right now, the market signals are pretty confusing, so this post to explain what I see in the Flagstaff market is fairly long.
According to statistics of the Northern Arizona Association of Realtors®, the number of homes for sale in the Flagstaff market has continued to rise - breaking the 1000 mark as we crossed into July. The pace of sales increased a bit - a total of 136 homes sold in June. The increase in the pace of sales had a substantial impact on the absorption rate. The "absorption rate" is a good market thermometer, telling us specifically how many homes are for sale relative to the number of buyers available to buy them. Typically, a six month supply of homes (number of homes on the market divided by number sold in the previous month) is a perfectly "balanced" market. Anything larger than six months is a buyers' market and anything smaller is a sellers' market. The movement in the number can tell us something about current market trends. We continue to be in a "buyers' market," however, the absorption rate reduced from the beginning of June to the beginning of July -- from 9.47 months to 7.4 months. What accounts for the movement? Prices are falling and buyers are beginning to jump in to take advantage of that movement. (When is it right to "jump in"? See some good advice in an article written by real estate guru Blanche Evans, and published in our newsletter earlier this month.)
I've been doing some year-to-year comparisons in the last week, compiling the tables below. I present statistics in two separate tables because of the difficulty of comparing this year's market to last on an overall basis. (This is because the entry of apartment conversions has skewed the statistics). Numbers for the overall market are in the first table and the second table covers single family, free-standing, residences. These numbers represent any units with Flagstaff mailing addresses, whether inside the city limits or not:
MLS Statistics | Median Price | Average Price | Homes Sold | Price/Sq. Ft. based on median price | Days on the Market (Median) |
2d Quarter 2007 | $300,000 | $354,063 | 335 | $198 | 72 |
2d Quarter 2006 | $340,000 | $390,519 | 344 | $207 | 46 |
MLS data for single family, townhomes, condos and manufactured homes with Flagstaff mailing addresses. See note at bottom of this post.
MLS Statistics | Median Price | Average Price | Homes Sold | Price/Sq. Ft. based on median price | Days on the Market (Median) |
2d Quarter 2007 | $385,000 | $467,958 | 180 | $202 | 71 |
2d Quarter 2006 | $384,000 | $460,000 | 235 | $206 | 50 |
MLS data for single family residences with Flagstaff mailing addresses. See note as bottom of this post.
The median price for the overall market shows such a dramatic drop because of the number of smaller condo units that have sold - products that were not available for sale last year. In contrast, there is almost no change in the median price of single family homes. If one looks at the price per square foot there is a 1-2% drop in price. In sum, the price for single-family residences is stable, but the time to sell period is up and sellers should plan to price slightly below last year's comparable sales in order to get their homes sold. The increase in the days on the market from listing to sale compared to last year is also dramatic and will continue to press prices down as sellers adjust their expectations on price as they confront the reality of supply and demand. However, if the absorption rate were to fall next month at the same rate it fell in June, we'd be in a "seller's market" again and that pressure on sellers would abate. So, if you're thinking you need housing in Flagstaff, now may be the time to take the leap.
Ann Heitland, Flagstaff AZ Real Estate
Flagstaff Community Information
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Note: "MLS" data is based upon information from the Northern Arizona Association of Realtors® and is deemed reliable for sales reported to the association, but is not guaranteed and does not include all sales in the market area.
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