Housing prices are again moving further out of the affordable range for the average Flagstaff worker.
According to the Northern Arizona Multiple Listing Service, the median sale price for a single-family home in the greater Flagstaff region in 2015 was $330,000, a 5 percent increase from 2014.
Several bank-sponsored online calculators put the income needed to purchase a house at that price with a 30-year fixed mortgage and an interest rate of 4.5 percent and moderate household expenses and debt at $91,000.
But the median family income in the city of Flagstaff, according to Census and HUD data, is around $65,000, enough to afford only a $231,000 house, based on those same online calculators.
So the current unofficial Flagstaff affordability gap, depending on the calculation, is $26,000 below the qualifying income (about 28 percent) and $99,000 below the median-priced house (about 30 percent). Those figures are in line with gaps in Flagstaff before the recession.
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ALWAYS A CHALLENGE
Finding affordable housing in Flagstaff has always been a challenge for working families, said Devonna McLaughlin, executive director of Housing Solutions of Northern Arizona. Even with the recession, it was a challenge.
“In Phoenix, the market tanked so much that it kind of solved Phoenix’s affordable housing crisis,” she said. But prices in Flagstaff never got low enough to fix Flagstaff’s affordable housing crisis.
“It’s really a workforce issue,” McLaughlin said. Employers can’t attract workers because there isn’t enough housing at a reasonable price.
A median housing price of $330,000 is quite a bit of a climb in price since the bottom fell out in 2012, when the median sale price for a Flagstaff home was $252,000, said Century 21 Flagstaff Realtor Stephen Brighton.
However, Flagstaff’s housing market has a ways to go before it reaches the previous market high price of $379,000 during the peak of the housing boom in 2006, he said.
Part of the reason that Flagstaff’s housing prices didn’t adjust like those in Phoenix did is because Flagstaff has such a limited housing pool, McLaughlin said.
“It’s really a complex situation with the market, supply, income and external demand. It’s a challenge for families and employers who are looking to bring new workers here.” McLaughlin said.
At the same time, the sale of homes in Flagstaff continues to increase. According to the listing service, sales of homes in the greater Flagstaff area increased 10 percent in 2015 to 1,101 sales.
That’s the most sales Realtor Stephen Brighton said he has seen in 10 years.
The number of distressed, foreclosed and short home sales has decreased from a high of 314 in 2011 to 31 in 2015, Brighton said.
RENT A PROBLEM
Even finding affordable housing to rent can be a problem, McLaughlin said. According to the U.S. Department of Housing and Urban Development, the market rent for Flagstaff is about $1,311. But a September survey of 40 apartment complexes in Flagstaff by Housing Solutions came back with an average rental rate of about $1,527.
Brighton said he’s getting more buyers who are looking for properties to rent. People are investing in real estate because the stock market has been down in the last few weeks due to a weakening world economy. Low mortgage interest rates also make real estate a really attractive investment.
“As far as buying for rentals, everything points to Flagstaff,” he said. It’s a desirable place to live and visit, but, mainly, Northern Arizona University’s student population is expected to grow over the next several years.
“You have to put those students somewhere,” he said.
“We need more units that are available to buy or rent,” McLaughlin said.