Almost everything was up in Flagstaff home sales for November 2011 compared with November 2010: Median price up 4.9%, to $267,500. Number of sales up 5%, but still a very low number – only 54 Flagstaff single-family homes sold in November. The median price per square foot was also up to $114 compared with $109 for November a year earlier. The only thing down was the number of listings, down nearly 19% compared with the same check-point a year earlier.
November’s report suggests increasing Flagstaff home prices in the coming months – “all else being equal,” as the saying goes.The trick may be that stubborn “shadow inventory” that we’ve been talking about for years now. There are many home mortgages still in or headed toward default – most of these homes will have to be sold either through the short sale process or through reversion to bank-ownership and then sale. In Flagstaff, there is a larger shadow inventory of a type unique to resort communities – second (or even third) homes whose owners would have liked to have sold last year, the year before, or now. But they have been holding out for a price increase. Those homes will gradually come onto the market as prices rise – the higher the prices go, the more of these homes we’ll see listed, and that will slow the price increases. So while we will continue to see months like November 2011, when the median price rose and the volume of sales was better compared with the year before, the improvement is going to be slow and sticky with some ups and downs. As some commentators say, we are “bouncing along the bottom.”
Buyers looking for a Flagstaff home priced below $400,000 would report to you that the pickings are slim – and you can see that for yourself in the accompanying chart. Whenever the months of available supply (shown in the far right column) falls below 6, the real estate industry calls it a sellers’ market. You can see a dramatic break between buyers’ market and sellers’ market in Flagstaff right now at the $350,000 point.
Distressed properties report: Twenty-two of the 54 Flagstaff single-family home sales in November were either bank-owned properties or short sales. As a percentage, that’s down substantially from earlier this year, but on higher overall sales volume. The banks have very carefully kept their percentage of active listings in Flagstaff well-below 20% of the market.
Quick update on Flagstaff townhomes: The median price of the 13 Flagstaff townhomes sold in November was $192,000. Five of those sales were distressed properties. At this price, it’s a sellers’ market for Flagstaff townhomes, too.
Note: The data reported here are based on single-family-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).