Pending Home Sales
Looking at the trends in pending home sales in the Flagstaff area you will see a sharp increase compared to the previous month. The Flagstaff market has over a 50% increase in pending homes sales for the Flagstaff area. As of June 3rd, there were 218 single-family homes pending, compared to 139 in May. This is quite astounding considering the total number of homes active in our market for all price ranges is only 180. We went back to look at the pending home sales as reported on June 25th in 2019 and there were 219 pending sales. We are essentially in the same position as we were just under one year ago.
Simply put we are still experiencing a critical shortage of homes for sale in the Flagstaff area. As an example, there are only 30 single-family homes for sale under $400,000. We have 61 homes under contract priced under $400,000. Buyers looking for a home under $400,000 are experiencing frustration with the low levels. Should they find a home to pursue, the frustration carries into the negotiation process where they often find competing offers and limited flexibility with a price. Many properties are selling above the asking price due to competing offers.
Nationally the pending sales are a bit different. While the National Association of REALTORS® (NAR) will not release their national Pending Home Sales report for May until June 29th, they did release the numbers for April. According to NAR in the April Pending Home Sales report there has been a two-month slide in pending home sales nationwide. Year of year numbers shows a 33% decline in April of this year. Chief Economist Lawrence Yun states he is not surprised by the decline and every state in the nation had varying policies on stay-at-home orders. In the report, NAR said the April decline in pending contracts was the largest decline we have seen since they started tracking these numbers in January 2001. It is anticipated to have the lowest number of closed sales in May of this year. There is a strong opinion pending sales will climb dramatically as stay-at-home measures are lifted and consumer confidence increases.
While the Flagstaff market is unique and varies from the national market, we will continue to keep close tabs locally and how we are holding out as a nation. Sellers on the fence about selling should really look at the current numbers and limited inventory. We cannot predict the future but can tell you there are many things in your favor for listing now. Give us a call for a market analysis of your home and neighborhood.
Flagstaff Home Sales for May
Year over year there was a dip in the market for May in the Flagstaff single-family home market. There were 75 homes reported sold in the Northern Arizona MLS this May compared to 104 sold one year ago. Confidently speaking, the COVID-19 related issues spilled into the Flagstaff market. The 75 sold this month is up from the 62 we reported sold in our April report. We should see increases in sold properties in June and July as many of the currently pending homes closeouts.
Lack of inventory continues to be the biggest obstacle we are facing in today’s market. We are seeing some of the best mortgage interest rates we have ever encountered which helps Buyers with affordability issues and confidence. If they can find a house to purchase that is not under contract they are pleasantly encouraged by the low rates. Many buyers feel like the current market conditions are like a feeding frenzy in Shark-infested waters. Our advice to buyers is to stay calm, make rational but quick decisions, and prepare to be very competitive with your offer.
As we discussed in the pending homes sales report above, the stay-at-home orders kept some buyers and sellers from entering the housing market. Although real estate was always considered an essential business we felt the impact. Some buyers were furloughed or displaced from their jobs taking them or delaying their pursuit of a home.
The median price for single-family homes sold in May in the Flagstaff area was $489,000 (not a typo). There were 4 condos and 26 townhomes sold in May.
Nationally we will not know about the May sales until after June 25th. For April year-over-year sales were down over 15% for single-family homes. According the April existing home sale report, NAR reported 36% of these homes sold went to first time home buyers. It is encouraging to see the confidence in first-time buyers.
Yun with NAR says“Record-low mortgage rates are likely to remain in place for the rest of the year and will be the key factor driving housing demand as state economies steadily reopen. Still, more listings and increased home construction will be needed to tame price growth.”
The median price for single-family homes sold nationwide was $288,700.