When I switched careers in November 1998, home prices were doing about what they had done for the last 40 years. Namely, they rose pretty much in tandem with workers’ wages and general inflation. What may have seemed like extreme shifts in local markets seem mild as we look back over the perspective of the last ten years, which began with a truly extreme housing bubble followed by an extreme crash.
As we came out of the crash, beginning in 2012, home prices rose precipitously in 2013 and 2014 but have now leveled out. This spring and summer, homeowners are having a bit of trouble accepting that the sharp increases of the last couple of years are not continuing. The result is that appraisers are undercutting homeowners’ expectations. The current situation could reflect a healthy return to normalcy (measured by the pre-bubble decades) as home prices are coming more in line with the fundamentals of wage increases and general inflation. We shall see how long this lasts. For the moment, factoring in exceptionally low mortgage rates, homes are historically affordable.
For info on the Flagstaff real estate market, visit our website at that link.