Flagstaff Housing Prices: The Numbers

The article released today (November 3, 2017) highlighted the fact that Flagstaff area set a record high for median sale prices in the third quarter of 2017 at a soaring $382,000. How does that compare to the past? That median price is 8% higher than the same period in 2016. That’s a significant jump! Not only that, but many neighborhoods around Flagstaff surpassed the levels of home prices in 2006-07–the previous high point for home prices in Flagstaff. Plus, the number of homes that sold in Flagstaff (388) is up 5% as compared to the same quarter in 2016.

While it is believed that prices may level out or dip slightly in the winter months because the first quarter usually has the poorest home sales, August and September were two record setting months in a row, both of which were up between 6-8%. So for those in Flagstaff with a smaller budget, you may want to act fast during the winter months to try and get a good deal before the prices tick back up yet again! With home prices only rising and rents sure to follow, you’re only hurting yourself by not investing in real estate if you are in a position to do so!

Want to learn more about Flagstaff housing prices and the real estate market in general? Contact The COLLINS TEAM today, your local experts in Flagstaff real estate.

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What’s your Debt to Income Ratio?

One good place to begin is your debt to income ratio. This is simply the percentage of your monthly debt obligation (student loans, mortgages, credit cards) to your monthly income. A common rule of thumb is that your debt to income ratio should be less than 36%. That number should include all of your housing expenses including your property taxes and insurance along with all of your other debts. For example, if your monthly income is $6,000, and your monthly debt obligations total $2,000, your debt to income ratio is 33%.

How much are you paying now?

This one may seem like a no brainer, but consider what you are paying right now–whether that’s rent or another mortgage. Are you comfortable paying what you do now? Do you feel a financial burden or could you afford to pay more? Use this as a barometer to gauge what you want your monthly mortgage to be. Just because you get approved for a certain number, doesn’t mean you have to borrow that much if it will cause you financial stress.

The old-fashioned budget.

The old school way of calculating what you can afford is simply 2-3 times your gross income. For example, if you earn $50,000/year, you can afford a home between $100,000 – $150,000. However, this really isn’t the best method because it doesn’t take into account your debt to income ratio we discussed above. It never hurts to just sit down with a pen and paper or open up your laptop and write out a complete detailed list of all of your expenses. This will factor in your debt to income ratio, how much you are paying now, and all of your other miscellaneous expenses to give you the best idea about how much you can afford for a mortgage payment.

Don’t forget about the down payment!

For the renters and first time home buyers out there, the down payment can sometimes get overlooked. While there are programs to help decrease or finance your down payment, having at least 20% to put down may mean you can avoid private mortgage insurance which can save hundreds each month. The more you pay upfront the less you pay per month. However, if you wait too long to save for a down payment interest rates or home prices may rise higher than the wait was worth.

NerdWallet has a great calculator to find out how much your approximate monthly payment would be depending on the total cost of the home, your city and your down payment amount.

Think you’ve got a better idea of the price range you should be aiming for? Don’t forget to get pre-approved so you can act fast in this competitive market! Once you’re ready to begin give us a call, send us an email or come in for a visit at one of our Realty ONE Group Mountain Desert offices in Flagstaff, Lake Havasu City, Sedona, Prescott or Chino Valley.

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