More than half of Flagstaff home sales in September were above the asking price, the number of sales has skyrocketed (September alone had a 40% year-over-year increase), and multiple offers have become nearly standard on properties that are even somewhat decently priced. The question is why?
The number one answer is exceptionally low interest rates. For months, rates have been hovering near or below 3% for a 30-year fixed-rate loan — the lowest rates since tracking began. This could save hundreds on a monthly payment for many buyers compared to just a couple percentage points higher, which partly explains why buyers are willing to pay more for a home.
Other potential reasons for the hot real estate market, at least in the Flagstaff area, are more directly tied to the pandemic. Coronavirus has caused a surge in demand of vacation homes for desert-dwellers in Arizona because travel has become difficult or less appealing, and many people from all over Arizona and California who are now working remotely would rather live and work in beautiful northern Arizona. This has led to a higher number of sales at all price ranges.
All of this unexpected demand has come with it’s own unique set of challenges. This market is overall excellent for sellers, but it can come with the challenge of not losing the sale due to buyer’s remorse or low appraisals. And for buyers, it can be great to take advantage of low interest rates and having a home in Flagstaff, but it can be very difficult to find the right home and win the bidding war (without grossly overpaying). Thankfully, there are strategies that experienced agents can use to address these challenges and increase the chances of win-win experiences for their clients. Everyone’s situation and goals are different, so I’d love to discuss how I can help you in this market.
Source for local statistics: Northern Arizona Association of Realtors MLS – Flagstaff area residential home sales.