On Dec. 20, the National Association of Realtors delivered its Existing Home Sales Report for November. Although fewer people bought homes in November, median prices continue to show year-over-year growth both nationwide and in Northern Arizona. Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – dropped 4.3 percent nationwide to a seasonally adjusted annual rate of 4.9 million in November from 5.1 million in October.
In the West, existing-home sales dropped 8.5 percent to 1.1 million in November, and are 10.1 percent below a year ago, in part from constrained inventory conditions. The median price in the West was $284,400, up 16.5 percent from November 2012 according to a National Association of Realtors (NAR) press release.
Flagstaff saw a 16 percent drop in the number of November sales from the previous month, while the median home price for November was $233,150. The year-to-date median was $262,442, up 14 percent over 2012, according to a Keller Williams Market Report. Compare that to the national numbers of $196,300 for the median existing-home price for all housing types in November, up 9.4 percent from November 2012.
“Last spring and summer, prices were up; we were seeing multiple offers on one listing. We saw homes selling at the asking price, and some above,” said Sharon Conte, real estate agent at Keller Williams Check Realty in Flagstaff. “Homes priced $300,000 and under are moving. In October and November, there was not a lot of inventory, so sellers had more negotiating power.”
“In the winter, there are some serious buyers out there. Right now, I’m working with two individuals from out of town. One is looking in the $400,000-500,000 price range and the other is looking in the $250-300,000 price range,” divulged Conte, an accredited buyer’s representative (ABR).
“Based on the increase of the median home price from 2012 to 2013, home prices should continue to rise,” said Conte. A recent Northern Arizona Association of Realtors report showed an 18 percent increase in the median home sale price from November 2012 to November 2013.
Looking forward to spring, Conte predicted, “In March, we’ll get more inventory. Each listing is on the market for shorter periods of time.” According to a Keller Williams market report for Flagstaff published in December, sold homes stayed on the market for an average of 78 days, compared to 113 days in 2012. “I feel it is still going to be competitive during that time. If the interest rates stay, then there will be people coming out to purchase,” continued Conte.
Allen Ginsberg was just out to a client’s townhome to conduct a market analysis. They had purchased the residence in 2010 the same year that a comparable property was purchased. The comparable, in the under $300,000 price range, sold for a five percent gain. “But the market is very funny,” said Ginsberg, a broker associate. “Not all neighborhoods are the same and not all price ranges are the same. Homes in the million-plus price ranges are still declining significantly. The reason is financing. In the past, financing was easy; today we can only borrow to $1.5 million.”
“Our mortgage market got cremated by the recession. In 2005, most of the [home] loans were conventional loans. Now, 17 out of 20 loans are government loans, which now max out at approximately $356,000,” said Ginsberg. That mortgage maximum was down from $450,000 as of Jan. 1 for Coconino County. “The mortgage market is on training wheels. There would be no recovery without government loans.”
“The feds announced recently that they are going to ease off. When the training wheels come off, the interest rates will go up to get the conventional lenders back in the market,” continued Ginsberg. He recommended that buyers take advantage of the low interest rates now, but warns that buyers should plan to keep their homes for at least five years.
Lawrence Yun, NAR chief economist, said, “Home sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit. There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years.”
“The rents are so high here – Flagstaff being a college town – it behooves people to own their own home,” Conte concluded.
“We’re going to see more of the same for 2014, a slow recovery,” predicted Ginsberg. “Things will get slowly better. The best recovery is in the lowest price category.” FBN
Allen Ginsberg
Ginsberg Group, Coldwell Banker Narico
1120 W. University Ave, Ste. 200, Flagstaff
928-220-5012
Sharon Conte, ABR
Keller Williams Check Realty
928-554-5253
123 W. Birch Ave., Flagstaff
www.flagstafftoprealestate.com
By Stacey Wittig
Flagstaff Business News