Constricted inventory keeping Flagstaff home sales volume low
The inventory of Flagstaff homes for sale continued to climb, slowly, in the month of March. Still, the number of homes for sale as of the beginning of April was 24% below one year ago. Single-family home sales in March barely increased to 42 closed sales from 41 in February. The median price of Flagstaff single-family homes sold in March was $269,450, which is up a substantial 14% from March 2012 due to inventory pressure in the lower price ranges.
The number of distressed properties sold in Flagstaff increased significantly compared with February sales, to 35% of the total. The trend in recent months has been for there to be fewer bank and short sales in the mix. While fewer homeowners are falling behind in their mortgage payments, according to national statistics, the number of foreclosures is creeping up as banks are clearing out long-standing delinquent loans. If this uptick in local distressed properties continues, the pressure on prices from low inventory will moderate.
As you can see looking at the chart of single-family home sales market activity by price range, there are two very different markets in Flagstaff: The market below $350,000 and the market above that price. In the lower price ranges, it’s a seller’s market. The higher price ranges are still in the recession.
Flagstaff townhome sales in March continued to be strong, largely due to new construction sales, which accounted for 6 of the 13 townhomes sold. The median price, $271,000, reflects the dominance of new construction, where prices are higher. The median sold price of a Flagstaff townhome is up $90,000 from March of 2012.
The National Association of Realtors® expects a 7% rise in home sales during 2013 and also a 7% increase in the median price of homes sold. They see mortgage rates increasing to 4% by the end of the year. Flagstaff will have to have a burst of inventory onto the market to meet this prediction for sales volume; however, matching the national prediction for median sales price increase in Flagstaff home sales is more than possible. But remember, the median measures the increase in the lower price ranges – because that’s where the sales are.
Note: The data reported here are based on home sales in the Flagstaff metro area (the City of Flagstaff and immediately surrounding county areas that have Flagstaff mailing addresses) as reported in the multiple-listing-service maintained by the Northern Arizona Association of Realtors.® The data may not reflect all sales (but it surely reflects most of them).
To buy or sell any Flagstaff home, please contact me: Ann Heitland at RE/MAX Peak Properties. See what our real estate clients have to say about working with us.