In unprecedented times the real estate market in Flagstaff is at an all-time high from just about every metric we can measure. The 2021 summer season was sizzling with average price per square foot of a single-family (detached) home crossing the threshold from $292 x sqft to $307 x sqft from March to April of this year. This was a historic first foray into the $300s x sqft and it has continued to climb each month since. In August the price per square foot soared to $336 x sqft and dropped only $2 x sqft to $334 in autumn. Just to put things in perspective, the price per square foot for a single-family home in September 2020 was $271 x sqft which was $63 x sqft less than it is now.
Currently the mean (average) single-family home in Flagstaff sold for $737,916 and last year this time it sold for $696,959, an increase of $40,957 for the same home. Even at these prices, what remains remarkable is that demand consistently exceeds supply. As of October 2nd, there are 74 single-family homes for sale in Flagstaff. This is less than one month of supply. A balanced market has between four to six months of supply. During this September 111 single family homes were sold. The average number of single-family homes sold per month in 2021 was 100. At this rate of absorption, we would need between 400 to 600 homes available for sale in a normal market. With only 74 single-family homes for sale, we are anemically below average, thus sustaining a sellers’ market.
Taking a look at attached product consisting of condos and townhomes in Flagstaff the story is similar. Last September the average price per square foot for a condo was $240 x sqft. This September it is a whopping $316 x sqft. That is an increase of $76 x sqft which means that the same townhome costs $144,683 more this September than last. Thus, the mean price of a condo or townhome is now $492,119 versus $347,436 last year this time. As a result, affordability in Flagstaff is at an all-time low. According to the U.S. Bureau of Labor Statistics the average hourly wage in May 2020 was $23.79 per hour in Flagstaff versus $27.07 per hour nationally. With a mean salary of $49,483 per year it is increasingly difficult for the average family to qualify as a first-time homebuyer.
As of today, there are 27 condos and townhomes available for sale. During the month of September there were 35 units sold which coincidentally is also the average number of attached units sold each month this year. At that pace the market should have between 140 and 210 attached units available which would equal four to six months of supply. Flagstaff is at 12% to 19% for attached product and 16% to 25% for detached product availability, well below where normal inventory levels should be for a balanced real estate market.
Not taking into consideration the high $2,568,189 and low $237,500 single-family home sold in September, the median detached home sold for $614,000. The median attached home sold for $460,000 during this same time period with a high of $1,230,000 and low of $188,000 for condos and townhomes. During August the median attached and detached home sold for $425,000 and $620,500 respectively. Of note, September is where we start to see some slight differences, condos and townhomes median was higher than the month prior and single-family homes median was lower.
Will October data show signs of chilling? If it is anything like last year, then yes it will. But then again, nothing about 2021 Flagstaff real estate has been predictable. Stay tuned next month to find out if we will see seasonal autumn changes. Email to let us know your real estate prediction.
Text Lori