Hi there!! Greetings from Flagstaff, AZ. It's a lovely day fresh off a snowstorm from the last few days. The Mountain looks gorgeous and I'm sure the recreational activities up there are incredible. It's this type of setting that I think is effecting the following market stats and driving the value / investment potential for this market. I'll share the stats and then share my opinion on where this market is headed and I hope others with experience in this market will chime in.

The NAAR Flex MLS isn't the strongest tool for research. I've been manually scraping monthly data back to 2018 to see how things have changed and are changing. I'll be building a program to assist with this but for right now I'm relying on Google Sheets. I've found some interesting things in my research and wanted to share with them with you.

The following is a breakdown of how the Average Sale Price, Median Sale Price, Low Sale Price, and High Sale Price have changed from year to year on an AVERAGE ANNUAL basis since 2018:

Sorry if you're not the type of person to enjoy stats given in this format. Below are visuals to show you how things are moving:

Just for added understanding look at the average annual changes for each price category:

Average Sale Price: +$77,289 or +15.13% (per year since 2018)

Median Sale Price: +$62,585 or +14.14% (per year since 2018)

Low Sale Price: +$6,138 or +5.90% (per year since 2018)

High Sale Price: +$403,707 or +19.85% (per year since 2018)

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These are pretty incredible figures. An average of $400k growth in the high price since 2018 in Flagstaff? That's pretty nuts.

This leads me to my thoughts on where the Flagstaff market is potentially headed. In my opinion, Flagstaff will become Arizona's version of Vail, Colorado or a Breckenridge, or something along those lines. The type of place where property values are going to continue to balloon as more and more elites from densely populated hotter-climate cities buy their second or third homes to enjoy as getaways and possible short-term vacation rentals. It's impossible to know how soon Flag will get to that point, there are a million variables involved but this data is telling. I only tracked the data back to 2018 to capture a 5-year picture of the market and my assumption is that if you look back further you'd find similar changes over time. But what this picture tells me is that the luxury market here in Flag has massive appreciation potential for those that partake. Averaging almost 20% growth in the High Price category for the past years, with one year adding an astounding ~$755,000 to the previous year's average, is no small thing - even with the overall market seeing such a climb in the latter years of that window. And let's not shake a stick at the average annual growth in the Average and Median price categories either.

One of the things I think about the Flagstaff market is that it's sort of its own bubble. There isn't too much new housing development or commercial expansion, at least not in the near-term works. With this comes the basic scarcity aspect of a market. As I write this there are only 138 actives in Flagstaff. This is a really low number of available options for a place that has incredible amenities and equity growth potential. We're headed into the stronger months of the year but we're still seeing high buying activity. The market and the city of Flagstaff have something for everyone and in my opinion that could be especially true for the passive investor or 2nd / 3rd / 4th homeowner.

Let me know what you think. If you have any experience in the market here I'd love to see your feedback.

Thanks for reading.

Phoenix, Arizona

3 Votes