The Flagstaff, AZ metro area housing market in February 2025 presents a complex landscape characterized by declining sales prices and increased inventory. The Median Sales Price has decreased to $646,000, marking a significant year-over-year decline of 10.6%. In contrast, the Median List Price has risen by 4.9% to $722,500, indicating a potential gap between seller expectations and buyer willingness.

The median Price Per Square Foot has also seen a decline, dropping by 3.6% to $365.85. Meanwhile, the Median List Price per square foot has increased slightly by 1.9% to $392.94. This divergence suggests that while sellers are optimistic about pricing, buyers are negotiating lower prices, possibly due to increased inventory and market conditions.

Sales activity has slowed, with 82 Homes Sold, representing a 9.9% decrease from the previous year. However, Pending Sales have surged by 35.0%, reaching 135, which could indicate a future uptick in closed transactions. New Listings have increased significantly by 52.2%, totaling 172, contributing to the overall inventory growth of 30.6%, now at 380 homes.

The Months of Supply have dramatically increased by 140.0% to 4.6 months, suggesting a shift towards a more balanced market or even a buyer's market. Despite this, the Median Days on Market have decreased slightly by 4.0% to 61 days, indicating that homes are still moving relatively quickly once listed.

The average sale to list ratio has improved by 1.5% to 98.9%, suggesting that homes are selling closer to their asking prices. The percentage of Homes Sold above list price has seen a modest increase of 0.7% to 18.3%. However, Price Drops have decreased by 2.6% to 14.2%, which may reflect sellers' adjustments to align with market expectations.

Finally, the percentage of homes going off the market within two weeks has decreased by 8.9% to 31.1%, indicating a slower pace in the initial stages of the selling process. Overall, the Flagstaff housing market is experiencing a period of adjustment, with increased inventory and changing buyer-seller dynamics shaping the landscape.