September sales show a strong increase in median price and price per square foot from September 2013 (18% AND 17%, respectively). There was also heathy increase in sales volume (6.5%). Sales of homes priced over $500,000 increased 110% from September 2013. Overall, we can look back over a strong home-selling season for Flagstaff in 2014.
All of that is good news for home sellers. For prospective buyers looking for a home priced below $400,000, the market remains very tight with well-less than six months’ supply of homes, which is where we’d expect a balance in bargaining power. For sellers above $400,000, even though the market is much improved, the market remains soft – supply is well over 6 months’ worth in all the higher price ranges.
Looking forward, pending home sales (shown in the chart as ACR, PBK and Pending) tell us that the next few months will be slow, and that’s not just seasonal variation. Escrow openings went off the cliff in September according to title company and transaction coordinator sources with whom I’ve talked. Comparing homes under contract as of the beginning of October with the same time last year, the MLS statistics show a drop of 18% in pending sales.
Nationally, employment numbers released this week were encouraging; however, wage growth was “tepid” in the word of a National Association of Realtors® economist. That’s a negative for home purchase affordability and could work against price growth. However limited wage growth removes the specter of inflation, giving the Fed more room to maneuver without raising mortgage rates, which, if they rose, would be a more immediate threat to affordability. Prices will still grow given an expanding buyer base relative to limited supply. The question is, how much will that buyer base expand in Arizona and Flagstaff?
We’ll be keeping our hand on the pulse of the Flagstaff housing market to best advise our clients. When you are ready to buy or sell, give us a call at 928.714.0001, or start by visiting our Flagstaff homes website.