Inventory remains slightly low compared to previous years. This is typical for Flagstaff in the winter months, but we usually enjoy a few more properties to choose from this time of the year. Inventory could be low for a variety of reasons; homeowners could still not be seeing enough equity in their home to consider selling, perhaps there isn’t enough to choose from when the homeowner goes to buy a new place or perhaps the prices have risen just enough to put a new house out of reach for a particular buyer. Regardless of the reasons, there are fewer homes listed for sale right now than in past years. This is one example of how new home builders are benefitting. With low inventory of resales, many consumers turn to new builds to meet their needs.
Obtaining a home loan remains slightly easier to get than right after the crash of 2008. Guidelines are strict and you must have your down payment, closing costs and credit scores verified; however, loans are available at a desirable rate. Working with a well known, quality, local lender can help to streamline this process. Many times, local lenders can offer the same rates and costs as the big banks and you’re dealing with someone who can offer more personal service and attention. Once you have secured financing and are in contract to purchase a home, you’ll still have to wade through the appraisal process. The appraisal is ordered by the lender using a third party vendor. The appraiser will use sales of comparable properties and scientific methods (such as measuring square footage) to arrive at an appraised value of the home. In order for the file to make it through underwriting, the property must appraise at the contract price.
With prices having risen in the last 12-18 months, we’ve noticed many of our investors have gone away. Typically we only see the investors come in when prices are at rock bottom. Usually investors are paying all cash, that is hard for a typical buyer with financing to compete with. We likely won’t see a surge of investors again for quite some time.
As mentioned previously, prices have risen. Not at the alarming rate they did in the rise of 2004-2007, but have risen nonetheless. The majority of homeowners are now starting to see a bit of equity in their homes again. This trend doesn’t always mesh well with wage earners, who are likely not seeing their wages increase at the same rate home prices are increasing.
Buyers in our local market don’t seem to be in as much of a hurry. They are willing to ride it out and not jump into a purchase of a home they don’t love. They’re not wanting to spend top dollar for a home that doesn’t have everything on their list. This was not quite the case six months ago.
The cost of living in Flagstaff remains a valid concern for many folks trying to purchase a home in this town. With Flagstaff real estate, you aren’t just purchasing a house to live in. You are also buying a community, four distinct seasons and a lifestyle. This all factors into the price you pay for a home. This is something not so much trendy, but rather a constant in the Flagstaff real estate market. Flagstaff is a great place to live and a great place to be; however, the dream of homeownership is going to come with a heftier price tag. FBN
By Sherri Monteith