May is the start of the summer home selling season in Flagstaff, and even the continuing credit crunch didn't dampen the kickoff.

Sales of single-family homes in greater Flagstaff region for the month of May were up 12 percent when compared to last year. A total of 74 homes sold in May compared with 42 sold in April.

But not surprisingly, the May's median sale price of $356,500 — half sold for more, half for less — is down 11 percent from the May 2007 peak of nearly $400,000 for a single family home. It is up, however, by roughly 10 percent from April's median figure of $322,500.

The lower median price from a year ago may reflect the fact buyers are interested in smaller homes — the median-sized home on the market is more than 300 square feet bigger than those that sold in May and the asking price is $100,000 more.

Stephen Brighton, a Realtor with Century 21 Metro Alliance, suggests savvy buyers are connecting with sellers who are pricing their homes reasonably — those willing to give up the dream of getting the peak sale prices for their home that were common in 2005 and 2006.

He said aggressive pricing can make the difference between selling a home in a few months or spending the better part of a year with several Realtors trying to sell a home.

"Sellers are really beginning to understand they can sell their homes this season if they are willing to come down in pricing," Brighton said.

But Brighton admits some sellers can't bring the price down enough to attract buyers, noting those sellers owe their lenders more than the house is now worth.

Susan Eckhart, the owner of Bright Leaf Brokers and the president of Northern Arizona Association of Realtors, said the market is beginning to show signs of life after one of the slowest winter sales seasons in recent memory.

"It is beginning to trend up. The local market is doing some correcting," Eckhart said.

She agrees the homes that are selling are directly related to judicious pricing by sellers, comparing their home to recent sales and other similar homes for sale nearby.

"There are plenty of buyers up here," she said.

She also points to a NAAR statistic that states a third of the single family homes for sale take four months or longer to sell.

She suggests those homes sit idle because stubborn homeowners refuse to bring down their asking price.

"It shows what has sold and what is still on the market," Eckhart said.

Local Realtor Allen Ginsberg said another reason for slow sales in luxury homes is a jump in the interest rates for "jumbo" loans, essentially loans for homes worth more than $417,000. The difference in interest rates between a jumbo loan and standard loan is generally 1.25 percent.

For those borrowing on a fixed, 30-year loan of $450,000, this means an additional $400 a month to a borrower.

Ginsberg said he believes this, along with banks eliminating several other types of loans, has led to a slowdown in interest in high-end homes in Flagstaff.

Jim Snook, a real estate broker in Flagstaff, said he believes location is also playing a role in recent home sales, noting homes in Bellemont, Doney Park and Munds Park are slow to sell.

"The rural market is definitely having some issues," he said.

He suggests that with $4-a-gallon gas buyers are reluctant to buyer a home 20 miles away from Flagstaff. He the said the problem becomes more pronounced the farther away homes are from the city core.

"The price of gas is an issue, if we are talking about an SUV that is a gallon of gas each way," he said.

J. Ferguson can be reached at 556-2253 or jferguson@azdailysun.com.

Flagstaff Single-Family Home Sales

	May 2008	May 2007	May 2006	Currently listed on MLS
No. of Sales	74	66	90	1,060
Median price	$357K	$400K	$382K	$459K
Days on market	93	66	66	N/A
Price per sq.foot	$193	$206	$216	$208
Median size of home	1,830	1,936	1,763	2,205

— Source: Northern Arizona Association of Realtors