Flagstaff home prices drop slightly, how interest rates play a role in the rise and fall

According to Zillow, the median home price in Flagstaff is about $630,000. That’s down 2.6% compared to this time last year.
Published: Sep. 25, 2023 at 5:56 PM MST
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FLAGSTAFF, AZ (3TV/CBS 5) - Since 2018, home prices in Flagstaff have almost doubled, but for the first time since then, prices have dropped slightly and remained steady, and interest rates might be to blame for both.

According to Zillow, the median home price in Flagstaff is about $630,000. That’s down 2.6% compared to this time last year. While this is not a huge dip, it’s promising.

Kelly Broaddus has been working in real estate for 25 years. She said low interest rates post-pandemic spiked housing costs. “Once COVID hit, and interest rates went down to try to stimulate the economy, things just went bonkers,” she said.

Now, the high interest rates have helped the housing market stabilize a little, but they’re not the solution. “They really didn’t come down too much there,” Broaddus said. “It just made the the market a little bit more sluggish, just a little slower you know. But I think sellers are still really reluctant to admit that maybe they need to lower their prices.”

Flagstaff homes weren’t always this expensive. From 2021 to 2022, home prices jumped $100,000. So now buyers and sellers are in a tough spot. “They can’t afford it,” Broaddus said. “But also the frustration is that folks that purchased a home back when the interest rates were in the twos, right, they don’t want to sell, of course. Why would they sell?”

According to the city, almost 60% of residents said in a housing survey they were looking into relocation because of housing costs.

The city is looking at curbing the problem. They’re implementing a 10-year housing plan that aims to build almost 8,000 new homes by 2031. At least 10% would be affordable housing

Broaddus said that even with all the obstacles, you can still purchase a home. “As long as you have a job and decent credit, we can find a way to get you in a house and educate our sellers you know on things that they can do to help buyers get into their houses, too,” she said.

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