Halfway through the year, the Flagstaff housing market has hit new highs in the cost of houses sold.
The median cost of single family homes sold in Flagstaff so far was $416,000, about 8% higher than the cost of homes sold at this time in 2018, according to Stephen Brighton with Century 21 Flagstaff Realty.
But it wasn’t just the first half of the year as a whole in which prices saw new highs -- several months set new marks for median prices as well.
February, April and June all broke records when it comes to median house prices, with the prices of homes sold in June being about 19% higher this year than last June, Brighton said.
At the same time, the number of houses being sold is down in the first half of this year by 16%, Brighton said. That equates to just 473 single family homes during the first two quarters.
That means while fewer homes are being sold, the ones that are selling are being purchased for more money, Brighton said, adding that those numbers are also influenced by a lack of inventory in less expensive price ranges.
Based on that, Brighton said it’s safe to assume a significant portion of those sales are for second homes.
The housing market had seemed to be somewhat struggling at the beginning of this year and the end of the last year, but Brighton said markets tend to get stronger in the summer months. When the weather is good and school is out, people are more likely to move and buy houses.
That’s why Brighton said he doesn’t “put much credence on the first quarter numbers in the housing market.”
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For Arizonans looking for second homes, Brighton said Flagstaff is also an attractive option with milder weather compared to southern and central Arizona.
Lower interest rates may also be making mortgages easier to get for those looking to buy, which encourages consumers to buy more homes and spend more money on them, Brighton said. The Federal Reserve lowered interest rates last month for the first time in years, which influences the rates set by banks across the country.
But Brighton said what may be more influential is that some investors are looking at bonds as opposed to stocks. With politics and trade policy more unpredictable on the national and international level, some investors may be putting more money into bonds, which are generally safer investments, Brighton said.
Any increased interest from investors into mortgage bonds would mean more money to go around on the consumer end.
Brighton said he expects to see double-digit increases for both sales numbers and median prices as the July numbers begin to come in, and added he wouldn’t be surprised if it is a similar story in August and September.
The third quarter of the Flagstaff housing market is always strong, Brighton said.
“Without a doubt, it’s all systems go,” Brighton said.
Updated for corrections at 10:25 a.m. on August 7.