July 9, 2006

Flagstaff Housing Market ‘Cooling Off’

The Arizona Daily Sun has this headline this morning; ‘Hot housing market starts cooling off. “Home prices in Flagstaff have remained relatively stable since last year’s massive increase, but homes are staying on the market longer as buyers take their time.”

“Statistics from NAAR show homes staying on the market an average of 65 days, almost two weeks longer than last year. The number of homes sold for the second quarter of 2006, 320 homes, is also down 17 percent from last year’s figures.”

“A perfect example of the cooling off in the local real estate market might be found in a 2,540 square-foot home in Ponderosa Trails. The owners of the home have had to reduce their asking price twice, an action unheard of last year, when real estate agents say offers on homes would come in hours after the home was listed for tens of thousands over the asking price.”

“Beth Heerding, a Realtor who is helping sell the property, said incentives and price reductions are a sign of the times, with more sellers competing for fewer prospective buyers. The owners reduced their initial asking price from $499,000 to $474,900 to better compete with other homes on the market and because the owners are moving out of the Flagstaff area.”

“Realtor Ann Heitland said in addition to asking price reductions, offers of down payment assistance or paying the closing costs are some of the incentives sellers are using to close the deal here in Flagstaff.”

“Bill Ring, a Flagstaff land use attorney who works closely with several developers, said developers are giving close scrutiny of their future developments, but no one is scrapping their plans.”

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Comment by Ben Jones
2006-07-09 11:07:37

‘ the 40 percent increase seen during last summer’s real estate boom’

And incomes in Flagstaff did what? Prices actually started taking off in 1999.

‘an action unheard of last year, when real estate agents say offers on homes would come in hours after the home was listed for tens of thousands over the asking price.’

How can this not be crazy speculation?

‘no one is scrapping their plans.’

The Flag paper is bulging with new homes for sale by flippers, and yes, thousands of houses, townhomes and condos are being advertised and built.

Comment by Catherine
2006-07-09 11:50:32

What a crack-up! Same thing here in Prescott…plenty of agents/brokers saying building will continue. Uh, sure. Do these people know that there are many ways to check the MLS and watch the 100+ new listings per day, the equal amount of price reductions, the 10-12 pendings (later to fall out), and the growing number of BOM and expired?

Do they know about the builders not paying subs?

Do they practice saying this stuff in front of a mirror?
Really, it can’t be just wishful, ignorant thinking…these people KNOW what’s up, so I guess I gotta call them liars.

Comment by Housing Wizard
2006-07-09 13:00:18

Are you seeing a lot of escrows falling out Catherine ? If so ,do you know the reasons ,(appraisals not hitting ,credit being denied ,etc.)?

Comment by moqui
2006-07-09 14:08:06

I spent the holiday week with a large group of friends that included three Prescott realtors. They and many other R/E buddies of theirs were their own best customers the last couple of years. Now they are the GF’s holding stagnate properties. I’ll add that my friends consider this dry spell an anomaly that’ll end real soon because everyone from ca is moving there.
It was difficult for me to keep my mouth shut…alcohol didn’t help things

Comment by John in VA
2006-07-09 16:42:49

Yep, everyone from CA is moving everywhere: Phoenix, Reno, LV, Boise, Tempe, Seattle, Portland, Bend, Bozeman, Whitefish, Santa Fe, Bellingham, Sedona, Plano, etc, etc. If California is such a paradise, why is the rest of the nation supposedly filling up with refugees from the place?

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Comment by winjr
2006-07-09 19:23:39

Glad they’re staying the hell out of Pittsburgh. But, er, not surprised. :)

Comment by arizonadude
2006-07-09 13:09:21

Most of this increase in prices is simply pure speculation.Wages have gone nowhere and everyone has been living off the housing atm. The industry is desperate to keep the party going. Four simple words, Dont fight the fed. They have raised rates and eventually it will show up in prices. Seems most of the buying in these areas is done from out of staters with equity money and probably don’t need a real job. The locals are the ones getting bent over a barrel.

Comment by Phx Tim
2006-07-09 11:42:24

I’m not too familiar with the area. Is there even any well-paying work in Flagstaff besides NAU? Are all these $499K houses meant for loaded retirees?

Comment by Ben Jones
2006-07-09 11:49:28

I heard last year that the average pay in Flagstaff is $11/hour. I don’t think it is a big retiree location due to the cold winters. Actually, one has to take along a jacket at night in the summer.

Almost all the new developement is high end. It has never made sense. BTW, long time readers may remember that I mentioned Ponderosa Trails as flipper central in Flagstaff a while back. The number of new homes for rent in the town almost outnumbers existing homes.

Comment by Judicious1
2006-07-09 12:14:06

Speculators would have little hesitation in using hybrid type loans to buy these properties, correct? It will get ugly when the panic begins, probably in ‘07.

Comment by Mort
2006-07-09 13:02:36

I heard last year that the average pay in Flagstaff is $11/hour.

I wonder how many loans of $500k or greater have been made to people who made less than that $11/hr average in the year before the loan was issued. The lenders should hang from the tree in front of the courthouse right along side the speculators. Hang ‘em high! (rant off)

Comment by Housing Wizard
2006-07-09 13:11:26

No Mort ,rant on . I think we should hang these lenders at dawn .Find mess alot of people are in .

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Comment by robin
2006-07-09 22:39:23

Or, hang ‘em low. In either case, ust hang ‘em!

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Comment by Catherine
2006-07-09 11:51:58

Summer homes. A lot of builders hoped that Flagstaff/Northern AZ could become Scottsdale North.

Comment by Housing Wizard
2006-07-09 13:07:14

The winters are brutal in Flagstaff . I have seen alot of overturned trucks on the main freeway going by Flagstaff.

Comment by arizonadude
2006-07-09 13:11:32

The elk up there are awesome. It is a beatiful area but unfortunately prices are outrages.

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Comment by robin
2006-07-09 22:33:28

Have you eaten elk? Better than filet mignon. Had wonderful elk steaks once at a great restaurant on PCH in NO. Cal.

Not as hard as we thought to eat a great meal while looking out the window at the live elk that would eventually become dinner. Still a bit wierd.

Comment by Judicious1
2006-07-09 12:02:47

The good news: Prices remain stable.
The bad news: Nothing is selling.

Gee, I wonder how this will turn out…

Comment by Housing Wizard
2006-07-09 13:14:42

Now thats funny .

Comment by Ben Jones
2006-07-09 12:35:18

Viva Italia!

Comment by diceman
2006-07-09 12:51:30

This is (just one reason) why I can’t enjoy soccer. Ending the game, the entire playoff with penalty kicks? It’s like ending a baseball game with a homerun derby. No wonder soccer fans riot. The game is maddeningly frustrating.

Comment by Sunsetbeachguy
2006-07-09 13:01:26

I gotta agree with Diceman.

At least Wimbledon and other sports make ‘em grind it out until one sides will to win is crushed.

Comment by Ben Jones
2006-07-09 13:01:57

Yeah, it wasn’t the best game. Unless you had a little something on Italy!

Comment by Joe Momma
2006-07-09 14:24:18

I thought it was an awesome game, and I was actually looking forward to penalty kicks. It presented a different aspect of the game. But the best part had to be the continuous play without the 500 commercials you see in American sports. It was great. You could really enjoy the game.

When you consider that you can only have 3 substitutions you cannot continue for overtime after overtime. These players were exhausted.

It was a great way to end.


Comment by Spunkmeyer
2006-07-09 16:43:57

It’s only the 2nd time in the World Cup that has happened, IIRC. Recognize and appreciate history when you are witnessing it!

Comment by guyintucson
2006-07-09 17:09:03

Soccer is the best of the games.
To bad for you that you don’t understand it.
It the same as buyers don’t get the bubble

Comment by guyintucson
2006-07-09 17:10:55


Soccer is the best of the games.
To bad for you that you don’t understand it.
It the same as buyers don’t get the bubble

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Comment by Robert Cote
2006-07-09 13:06:08

The popular concensus was that Italy was the odds on favorite of the referees the German language share some common roots with English (England, US, Aus). The officiating set back American soccer a decade at least.

Comment by auger-inn
2006-07-09 13:21:39

That would smack of a conspiracy. You aren’t coming over to the “dark side” are you robert? Oh come on, plenty of room at least!

Comment by robin
2006-07-09 22:34:56

Dumb frog! (Back off, Cote, I’m 1/8 French!)

Comment by Inspired
2006-07-09 12:57:33

Good news Flagstaff is in a slump!
Bad news - prices are still at alevel as if it is 1/2 hour from Phoenix!
Not somewhere in the high desert on a mountain in 27,000 population borro. Insanit, its simply insane pricing.

Comment by need 2 leave ca
2006-07-09 13:20:25

If you think home loans of $500K are bad for people making $11/hr. How about $850K loan for someone making $13/hr. This wasn’t a speculator family, just an undereducated family that have purchased a suicide loan in San Jose thinking they had a good deal because the mortgage broker was crminally negligent. They could have saved themselves from this if they would have called me beforehand. Anyhow, I fully agree with Mort and would rant on that such brokers (and the FB if buying to flip) should be hanging in front of the courthouses. A few examples nationwide, and then there would be a cutback. Nothing like death to prevent it. I could rant for hours. Chased me out of CA - and Flagstaff (I got snowed in there in March at night) looked so dry that I was expecting to see the whole area go up in a big fire.

Comment by nobubblehere
2006-07-09 15:09:06

Does Flagstaff still have the Purena dog food factory. Used to be a big employer years ago.

Comment by robin
2006-07-09 22:45:59

Purina used to own Jack-in-the-Box, hence the resemblance to dog food in their tasty, cheap tacos. Never tasted like real meat but was great at 2AM with enough hot sauce! Do they still? (R/P)

Comment by Gadfly
2006-07-10 14:05:58

Yeah, it’s still there. It’s not like working for GM or a steel plant. From what I hear, it’s basic factory work stuff that pays low to mid teens/hour with the typical @$$hole managers, terrible schedules, etc. It doesn’t “drive” the Flag economy any more than Home Depot or Walmart.

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