The Path Towards Normalcy

Over the last several months the market has shifted slightly as it relates to price decreases, enough so that in another month or two we can call it a trend.  Over the last two years the Flagstaff real estate market rarely saw a price drop and in fact had price increases and bidding wars on many properties listed.  The multiple offer scenario has not evaporated, but now more than ever the condition of the home as well as a strong listing price based on comparables in the neighborhood are critical.

In May 2022 the median price of a single family home was $780,000.  This is the highest median price in Flagstaff history with April 2022 as the second highest median price at $755,000. The average price of a single family home sold was $962,225 and the average price per square foot was $409. May 2021 the median price was $599,000 which is an increase of $181,000 year over year.

The good news is that there were 69 single family homes sold in May 2022 and there are 157 homes still available on the market. Seasonally there is an increase in homes listed at the end of spring and beginning of summer.  That number typically peaks in July and then contracts to the lowest point during first quarter of each year.

Out of the 69 single family homes sold during May there were 11 or 16% that sold for exactly the list price.  There were 44 homes or 64% that sold for more than listing price.  There were 14 homes or 20% that sold for less than the listed price.  The range of the price decrease for those that sold for less than listed was $1,000 to $254,000.  The greatest price reduction at $254,000 was an 11% decrease from the original listing price of $2,250,000.

During April 2022 there were 77 single family homes sold and 13 or 17% sold for exactly the list price.  There were 62% that sold for more than listing price and 16 homes or 21% that sold for less than the listed price.  The range of decrease last month was from $5,000 to $104,000.  The greatest price reduction of $104,000 was 7% decrease from the original listing price of $1,399,000.

Both months were very similar as was March 2022. Surprisingly enough, these price reductions for homes sold are also similar to what occurred in May 2021.  However, the number of homes was significantly higher at 103.  There were 19 single family homes or 18% that were sold for less than the listing price.  There were 20 homes or 19% that were sold for exactly the listing price and 64 homes or 62% that were sold for more than the listing price.

At the end of the day it is still a seller’s market, however, expectations about pricing might need to be adapted a bit prior to listing on MLS. Buyers are now more discerning and spending a bit more time looking for the perfect home.  Additionally, with interest rate increases we are seeing fewer purchase contracts with carte blanche appraisal waivers.  An appraisal waiver is when the buyer agrees to pay in cash the difference between the appraised amount of the home and the offer price.

Another factor of much importance is the condition of the home.  As always prepping the home for sale by decluttering, minimizing furniture and possibly accessories so rooms appear larger, replacing lightbulbs, professionally cleaning carpets and windows plus enhancing curb appeal with a tidy front yard is very important and will pay dividends.  The path towards normalcy is refreshing and if that means homes are being priced well and getting show ready before hitting the market, this is a win for everyone.