Well the latest Prescott area housing figures are out, and it’s a pretty sad picture indeed. 

Prescott area residential sales (as recorded in the Prescott MLS) are down 39% as compared with year-to-date sales for 2007.  

Meanwhile Prescott area Residential Listings (all areas as recorded in the Prescott MLS) have increased from 2,249 in May 2006 to 3,072 in May 2007 to 3,231 in May 2008. 

During the same period of time, the median home price in Prescott has fallen from $346,000 in 2006 to $320,000 in 2007 to $305,650 so far this year.

What do these statistics indicate?  As much as I would like to jump on the bandwagon and agree that with some that we have reached the bottom of the real estate market in the Prescott area, I cannot.  (See this Wall Street Journal editorial by CYRIL MOULLE-BERTEAUX  http://online.wsj.com/public/article_print/SB121003604494869449.html)  There is simply too much housing inventory and no indication of a substantial increase in sales, other than a typical seasonal blip, to predict that the end is in sight.  Add in the tightening of mortgage requirements, as well as increasing foreclosures, and it would seem that the current slowdown will continue into 2009.

What might be the indications to look for that when we’re starting to turn the corner?  Watch for statistcs that show a decrease in housing inventory, coupled with increased sales, and shorter days on market.  (Seasonally there will usually be a decrease in housing inventory in the Prescott area during the winter months, but this is normally the result of expired and withdrawn listings, rather than an increase in buyer activity.)

Prices may or may not trend lower.  Generally I would expect to see additional price softening in order to entice buyers.  However, if the Phoenix market and the Southern California market turn the corner before Prescott does, that may put enough buyers into the Prescott market that we may not see the huge price reductions that those areas have.  The signals out of Phoenix are very mixed.  On the one hand, most reports indicate that the slow Phoenix housing market is continuing (as indicated by this news article: http://www.azcentral.com/12news/news/articles/2008/05/09/20080509housingdepression05092008-CR.html).  However, on the other hand, there was this news video about buyers camping out to purchase new homes in Mesa (http://www.abc15.com/content/realestate/story.aspx?content_id=991a23bb-8677-48ca-b782-b491f90e4de6&rss=704)  Only time will tell if Phoenix is starting to turn the corner.

So should buyers wait to purchase a home in the Prescott area in hopes of getting a better deal late this year or in 2009?  The answer to that question will depend on a number of factors.  I will be discussing the subject in detail in an upcoming blog.  Generally, though, this is a Buyers Market, and they are the ones calling the shots.  Sellers are either motivated to sell, or they are not.  There are great deals to be gotten on certain homes in the Prescott area, if the seller is motivated.  So the bottom line is this:  one could negotiate a great deal now (say 10% below market) or wait til next year in hopes that Prescott housing prices will fall another 10%, in general.  (Prescott median home prices fell 8.6% last year and have fallen 2.7% thus far this year. (The last time Prescott saw a decrease in home prices was back in 1997.)  Will it be worth the wait?  That will depend on your individual circumstances, and I will give you several things to take into consideration in my next blog.