Business Insider tagged Flagstaff as one of the best housing markets for the next five years. According to the article, Flagstaff is in the top ten appreciating housing markets in the nation. In the report, the news magazine cited recent Fiserv Case Shiller Indexes that measure average change in home prices.
The Flagstaff housing market is expected to appreciate at the rate of 10.9 percent annually between 2011 and 2016. That is compared to the 3.7 percent national average for annual appreciation over the same period. While Flagstaff ranks number five in the country, Carson City, Nevada comes in at the number one spot.
“It looks like the [local] market is turning around,” said Flagstaff realtor Terry Balentine. “You wish you had the crystal ball to see when it will bottom out, but when you look at the statistics, you see the values coming up.” Balentine, past treasurer of the Northern Arizona Association of Realtors (NAAR), cited NAAR transaction reports that show that the average price of a Flagstaff-area home sold in August was $7,500 higher than homes sold in the first quarter of 2011.
The Fiserv report is good news for those who recently read of lagging Phoenix and Tucson real estate prices. Northern Arizona realtors warn that the local real estate market is much different than Phoenix or Tucson markets.
“Flagstaff is an absolutely, completely different market than Phoenix and Tucson. We’ve always fared better than those two markets,” said Paula Monthofer, president of Northern Arizona Association of Realtors. “Time and time again, Flagstaff comes up on lists for best place to live and other lists, so I am not surprised that they would be projecting appreciation for Flagstaff. Just how much the appreciation will be, we’ll just have to wait and see,” said Monthofer.
Joe Kliegl, managing broker at Russ Lyon Sotheby’s International, said, “I believe the [Fiserv ] report is very accurate. I see evidence of such as we are starting to get multiple offers on some of these short sales.
“Flagstaff is already a market for second homes – people want to escape the heat in the summer. Now with the upcoming ability to make snow, we’ll see second home buyers for wintertime. That will increase real estate sales,” predicted Kliegl.
“There is an opportunity that we’ve never seen before: interest rates low and inventory high,” added Monthofer. “We are seeing savvy investors making their move to buy rental properties now. I would like to see first-time buyers to realize the dream of home ownership.” Monthofer recommends that first-time buyers speak to a realtor even if they think they are a couple of years out.
“Now is a good time to buy investment property,” agreed Balentine. “In the past, putting 20 percent down to avoid mortgage insurance was difficult for some investors. But now, with lower prices, the 20 percent down and monthly payments can cash flow with the rents that are currently being paid in Flagstaff. We’re all looking for cash flow.
“Where else can you invest $25,000 and can make the return that the rental properties produce here in Flagstaff?” asked Balentine, who speculated that rentals averaged $350-$450 per bedroom.
It may take some time to get back to pre-recession prices. In its worst one-year home price change, Flagstaff area home prices fell by17 percent in second quarter 2009 according to CNNMoney.com and Fiserv. “The shadow inventories that the banks have could move the market down. But hopefully the banks will trickle their shadow inventory onto the market, which would be to their advantage,” said Balentine.
“Shadow inventories are pent up listings that aren’t on the market yet, because of slow processing by the banks,” explained Monthofer. “We are anticipating some shadow inventory.”
But still, word on the street sounds positive for the Flagstaff market. “Last year, you’d turn in an offer, and you’d be the only offer. This year, there is a chance that you could be seeing multiple offers. That makes it look like the market could be turning around,” said Balentine, who is busier this year than last. “I’m going out to show property tonight and we are in negotiations now on an offer we made yesterday,” he added.
Business Insider, a business news website, has been listed as a top website by the likes of Time.com, Webby Awards and PC Mag.
Fiserv, Inc. is a leading global provider of information management and electronic commerce systems for the financial services industry. FBN
Top Ten US Cities for Projected Annual Growth 2011 to 2016
1.) Carson City, Nevada 11.9%
2.) Bend, Oregon 11.7%
3.) Medford, Oregon 11.2%
4.) Napa, California 11.0%
5.) Flagstaff, Arizona 10.9%
6.) Lakeland, Florida 10.3%
7.) Ocala, Florida 10.1%
8.) Reno, Nevada (tie) 9.3%
8.) Bremerton-Silverdale, Washington (tie) 9.3%
10.) Palm Coast, Florida 8.9%
CNN Money Home Price Forecast for Local Markets:
Grand View North Realty
1500 E. Cedar Ave. #6. Flagstaff
Terry Balentine: 928-853-4627
Realty Executives of Flagstaff
15 E Cherry Ave # 1, Flagstaff
Paula Monthofer: 928-853-9770
Russ Lyon Sotherby’s International
2076 S. Woodlands Village Blvd. Suite 101, Flagstaff
Joe Kliegl, Managing Broker: 928-779-5966