June Flagstaff home sales were up in price and volume, but this may not be a trend.
What’s striking to me about Flagstaff home sales in June 2013 is how little has changed from June 2012 Flagstaff home sales. Things have definitely improved – the median price of a single-family home sold in June 2013 is up 25% from June 2012; whereas, in June 2012, the median had fallen 11% from the year before. Volume of sales is up, too, but only slightly and we still have not sold over a hundred Flagstaff homes in a single month for years. The median price did breach $300,000, coming in at $323,600 for single-family home sales in Flagstaff in June.
The median price is up, in part, because higher-priced Flagstaff homes are selling. Last year, zero Flagstaff homes priced above $700,000 sold in the month of June. This year, at least there were a handful of such home sales. We still have a huge over-build problem in the $1 million-plus Flagstaff home category. Luxury golf course builders now seem to be aiming for $700,000 with smaller units coming to market.
Lower-priced homes for year-round Flagstaff residents are suffering an inventory squeeze. We have been seeing quite a bit of activity in the $300-000-$400,000 price range, which is a healthy historical range for Flagstaff. Take a look at the chart and you’ll see that for June it’s a seller’s market all the way up to $500,000. (A balanced real estate market is considered to be six months’ supply at the current pace of sales.) Still, it’s not an easy market for sellers, presenting appraisal and inspection issues with touchy buyers.
May and June were busy months for Flagstaff real estate agents, but in my conversations recently I find that agents’ perceptions (including my own) are of a slowing market – we’ve had fewer buyer calls coming in. This could be just a typical Flagstaff July: May and June have always been the busiest months of the Flagstaff home sales market year, followed by a mid-summer slowdown, and then a speeding-up of closings in September. This year, however, we’ve just had a significant increase in home loan rates, which has resulted in a real slowdown in people applying for mortgages to buy homes all around the country. The press has been talking about rising rates for several months, so what we saw in May and June may have been a little bubble created by buyers rushing to complete home purchases in advance of anticipated interest rate increases. If so, we may be slowing back to the level of activity we had for the previous twelve months. That’s better than the five years before, but not a full housing recovery by any means.
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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).