After a record number of housing sales earlier this year, the market seems to have shifted substantially as the number of houses sold in Flagstaff, Ariz., is down for the fourth consecutive month.
During the month of October, there were 109 houses sold, which is 11% fewer sales than October 2017, according to data gathered by Stephen Brighton of Century 21 Realty.
This drop comes after a similar reduction in September and the whole third quarter of this fiscal year. In September housing sales were down 38%, and sales were down 16% throughout the third quarter.
Brighton said a portion of this drop is simply seasonal. People generally prefer to move during the summer, when the weather is better and kids are not in school. Because of this, summer sees the most housing sales. Once school starts, most people are far less likely to move, preferring to hunker down and wait till the next year.
But perhaps more consequential than the weather, Brighton said, are interest rates, which have been increasing over the past few years. Higher interest rates mean costlier mortgages, which simply means it is more expensive to buy a house.
"Every time the interest rate goes up, it reduces the buyer's purchasing power," said Jessica Garard, a Realtor with Remax Peak Properties. With the uncertainty caused by recent national politics, Garard said interest rates have been fluctuating quite a bit.
Fluctuating rates probably won't cause someone moving to Flagstaff for a new job not to buy a house. But for those for whom buying a new house is not a necessity — those buying second homes, for example — the rates may make them hold off, Garard said.
Garard also pointed to the issue of housing inventory as another potential reason for the lack of sales, especially in the price range of under $400,000.
At the moment, there are only about 77 single-family homes under that price, and Garard said at least 40% of those are likely still under construction.
This isn't helped by the fact that because the winter is a slower season than the summer for the housing market, many Realtors pull houses out of the market as to preserve their supply for the summer selling period.
By the end of June, for example, the number of houses for sale in Flagstaff reached its height at 640 on the market. However, the number has come down since then to 605 at the end of September, according to Century 21 Realty's website.
This is still well above the lowest point this year, when there were only 395 houses on the market in January.
But that low number of houses on the market earlier this year didn't stop a record-breaking number of housing sales for the first quarter of the fiscal year, which is normally the slowest time for the housing market.
This may have been in part due to a dryer winter and concern on the part of buyers that prices would go up as the year went on.
All the while, the median sale price for a house in October set a new record for the month at $390,000. This October record was previously set in 2006, when the median sale price was $387,000, according to Brighton.
