The Flagstaff, Ariz., housing market has consistently seen high prices for single-family homes over the years, and the coronavirus didn't stop the median price of a home from rising 6%.
The 6%, or $25,000, increase compared to March 2019 leaves the median cost of a home in Flagstaff at $425,000.
Despite the economic turmoil for recently furloughed workers, people are still buying homes in Flagstaff as the city has a unique market that is easier to navigate for people buying a second home. However, March saw Flagstaff's already low supply of homes listed for sale drop even further, according to Melinda Morfin, president of the Northern Arizona Association of Realtors.
Morfin said people considering selling their homes are wary of opening them up to potential buyers as health professionals around the country call for social distancing in response to the COVID-19 pandemic.
As sellers hesitate on selling their homes, buyers continue to buy with less supply and at higher prices.
"My concern is if we don't get more inventory even with this demand, we may see prices go up instead of stabilize," Morfin said.
She was cautious to attribute too much of March's data to the coronavirus, and said she would know more in two to three months. Morfin mentioned that she wanted to see if the federal CARES Act reimbursement for U.S. citizens would shift the needle on buying and selling.
What Morfin felt comfortable sharing was that March saw 24% less single-family homes placed for sale in Flagstaff, but sales also increased 25% compared to March 2019, according to Northern Arizona Realtors Association data. Single-family homes make up two-thirds of the residential housing market in Flagstaff, Morfin said, and manufactured homes, condos, townhouses and mobile homes account for the other third.
Gary Nelson, vice president of the Arizona Association of Realtors and a realtor with Flagstaff Realty Executives, said Flagstaff isn't the only area that has seen its supply drop.
"I would probably say for the past couple of years we have had low inventory," Nelson said. "With the coronavirus being as prevalent as it is throughout the state, we even have a lower amount of inventory coming into the market."
In tandem, Nelson said tours of homes for sale in the greater Flagstaff area have dropped by 43%. Similarly, Nelson said showings in the greater Phoenix area have dropped 58%.
In order to entice home tours, both Nelson and Morfin said realtors have been adapting to the times. From virtual tours to giving buyers masks and shoe covers to prevent the spread of germs, Nelson said realtors are doing what they can to meet their clients' needs.
"Realtors are trying to get ahead of the health and safety concerns and make sure people are viewing properties in a safe manner, and they're offered for sale in a safe manner," Nelson said.
The median price of a home in Flagstaff has steadily risen since 2012 when the median Flagstaff single-family home was at its lowest price of $260,000. As the prices of homes rise, it continues to be a challenge for people in Flagstaff with lower income to invest in a home and mortgage without loan assistance, Morfin said.
Flagstaff's affordable housing problem stems from a few factors. The city is surrounded by federal and state land making it hard to expand and build, and Flagstaff is a highly desirable place to live due to its cooler temperatures compared to the surrounding southwest deserts, Nelson said. The combination of factors have forced many lower-income residents to rely on renting and embrace the mantra of "poverty with a view."
"Flagstaff is a unique market with second home buying. People here come with financial means already. Unfortunately, that has always been the case for Flagstaff," Morfin said. "We have a hard time keeping firemen, policemen, teachers and people that provide the infrastructure of Flagstaff because the cost of living is so high."
Morfin said whatever comes of the next few months, realtors will defer to their clients' wishes.
"At the end of the day it needs to be their decision," Morfin said. "If they want to sell right now, whenever they're ready, we'll be here."
