The Flagstaff real estate market is seeing its tightest inventory in MANY years, especially when it comes to the entry level market. I brought this up on the Jeff Oravits Show on Wednesday. That morning I checked MLS to see how many SINGLE FAMILY DETACHED homes were available in the entry level market. Typically these are homes well under $300,000. I was shocked to see that in the Flagstaff City limits there was only one available single family home listed below $300,000. This home, which has lingered on the market for over 110 days is listed at $210,000.
Since the show on Wednesday one more single family home has been listed at $295,000 in Smokerise in East Flagstaff. So as of this writing there are only two single family detached homes for sale in the Flagstaff City limits under $300,000. There are 16 condos, townhouse and mobile homes for sale under $300,000 in Flagstaff but to see only two single family homes under $300,000 is highly unusual and in all my years of investing in real estate very unprecedented. Even during the height of the real estate bubble in 2006-2008 I do not recall such a lack of inventory for entry level and starter homes.
There are many factors contributing to this such as lack of land (we are landlocked by national and state land), an increased student and general population and an unwillingness to develop more single family housing. There is also a lack of will to develop dense multi family housing as is evident with legal challenges to projects like the HUB in Downtown Flagstaff.
Will this trend continue? I do not have a crystal ball but you are now witnessing some of the highest priced entry level homes in many years in Flagstaff and an absolute lack of inventory. Without more housing options it will continue to be hard to find a home and and the rental market prices will surely continue to rise. But at what point do these “entry level” homes become completely unattainable by your first time and entry level home buyers? I’ll continue covering this issue on the Jeff Oravits Show.