This is a historic high median price in Flagstaff, which has more than doubled from $340,000 in only seven years since 2015.
By the time we entered the dog days of summer, third quarter exhibited signs of slowing absorption, from 370 homes sold in Q3 of 2021 to only 258 homes sold in Q3 of 2022, translating to 37% fewer home closings – yet inventory was not depleted; thus, the two additional interest rate increases had almost an immediate impact of stalling homes sales. The fourth quarter median price point diminished each month down to $650,000 in December 2022. However, despite this, the average price bounced around, as did the price per square foot.
Now, if we look at the totality of 2022 and compare that to 2021, we have had an extraordinary record-setting year by all accounts, barring number of homes sold – which dipped down to 864 homes rolling back to the 2014 rate of absorption for the year. During 2021, there were 1,186 single-family homes sold, which is 322 homes fewer than 2022 and just shy of the historic high of 1,305 homes sold in 2020. What this means is demand has weakened and if interest rates continue to increase, this may be an ongoing trend.
All other 2022 statistics are positive, including a 15% jump in average price of a single-family home increasing $110,149 from $740,548 in 2021 to $850,697 in 2022. The average price of a condo/townhome leapt 17% or $70,750 from $420,420 in 2021 to $491,170 in 2022. Interestingly enough, the price per square foot grew much more this year – from $291 in 2021 to $364 in 2022 totaling at least $73 per square foot more than in prior years. Part of the reason being the new multi-million-dollar condos built and sold in Pine Canyon; the other part of the equation simply being the lower entry level price point spurring demand and competition for attached product.
Median price for a single-family home increased $102,000, or 17%, from $610,000 in 2021 to $712,000 in 2022. This is a historic high median price in Flagstaff, which has more than doubled from $340,000 in only seven years since 2015. What this means is that a single-family home costs twice as much now as it did then, yet salaries have not doubled during the same time period. Although most of us protest the interest rate increases, one impact it will have is tapering price appreciation to a more sustainable rate, which is great news for buyers.
A crystal ball can predict home price appreciation with almost as much accuracy as a meteorologist can predict a winter snowstorm. My thoughts are that the tale of two markets will continue to mirror the second half of 2022 into 2023 and beyond, with hope that there are no further interest rate increases. Cheers to an incredible 2022 and here’s to a healthy and prosperous 2023 for all! FBN
By Lori Anna Harrison
Lori Anna Harrison is a Flagstaff native and 19-year real estate veteran commencing post graduate school with Shea Homes. Harrison is a full-time licensed REALTOR with Zion Realty, LLC. Call her today at 928-396-5851 or text 602-524-5674, email lori@AZdreamlifestyle.com and visit AZdreamlifestyle.com