Realty Executives of Northern Arizona
Looking at the median price over a full year, our peak was in 2006. That year, our median Single-Family home prices rose to $384,000. That year we sold 778 homes and had 1681 new listings come to the market.
After getting asked numerous times how our home pricing is today, compared to the peak before the recession,
Now to clarify things just a little, we are looking in the general Flagstaff area, 86001, 86004, 86005, and only at Single Family homes in that area.
Fast forward 12 years to 2018, our median single-family home prices rose to $405,750 or a 5.7% gain over those 12 years. We sold 952 homes in 2018 and 1297 homes came to the market.
So there you have it, we are up 5.7% over our high point back in the pre-recession era.
But hold the phone, what about inflation over those 12 years?
This goes well outside my expertise, so I reached out to Emy Tice, a Certified Financial Planner with WT Wealth Management here in town.
According to Emy, the average annual inflation for that twelve-year period was 1.86% per year. If the housing prices in 2006 had increased at this inflation rate the median house price today should be 384,000*(1+.0186)^12 = $479,044.
The compounding annual rate of increase for home prices was actually only .46% per year based on the median home prices in 2006 and 2018, from the Yearly Market Comparison Reports out of the MLS.
This, of course, is due to the decline in prices during the market downturn and recession.
We had deflation in 2009, but for the most part we had increasing prices (inflation) throughout the recession. Prices of consumer goods kept increasing (except in 2009) while home prices were declining. With this said, our median Single-Family Home price has increased since 2006, but not at the rate of the overall average inflation.
Meaning, if Flagstaff housing inflation matched the average annual inflation rate over this past 12 years, we are right at 18% under the value of what a Single-Family Home price would be today.
Hope that helps in understanding our Single-Family home price over the past 12 years.
As questions come up, please never hesitate to reach out.
About the Author:
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Where the Experts are - Serving Flagstaff and Northern Arizona since 1977
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