As promised, we’re back on track here with the latest Prescott area real estate reports.  Ed Pattermann, Prescott area Windermere broker, has a knack for putting all these statistics into a very informative format.  Click on the links to these monthly graphs, and then I’ll discuss some of the trends we’re seeing here in Prescott.

Active Listings - Oct 2008

Homes Sold (Prescott MLS) - Oct 2008

Median Home Price - Oct 2008

Those are the graphs which tell the story on the current Prescott housing market on a month-to-month basis.  Home prices in the Prescott area remain relatively stable despite slow sales.  The slight decrease in housing inventory is the result of seasonal changes as well as a reduction in new home construction. 

 Now let’s look at the bigger picture with these graphs:

To me, these last graphs are the most telling.  The most apparent observation is that sales are very slow and inventory remains high.  What is encouraging, though, is that we may be leveling off at the bottom.  (As I have mentioned in previous posts, this will not be a low “point” with a quick bounce back, but rather a prolonged period at the bottom where inventory and prices have stabilized.)  Since our inventory has remained relatively unchanged for 2007 and 2008, it would seem to indicate that levels would not increase, except seasonally, though 2009.  As far as prices, we may see some more softening, especially at higher price points.  Prescott saw the biggest drop in prices from 2006 to 2007, with Prescott Valley and Chino Valley seeing some large price drops this year.  In Prescott, homes priced under $400,000 have seen more price reductions and sales as a result of those reductions.  Homes in Prescott priced under $300,000 continue to sell quite quickly, especially if the condition is above average.  On the other hand, homes in the $500,000+ category have seen fewer price reductions and fewer sales.  I would expect these prices to decline further thus causing sales to quicken.

So, is this good news for sellers and buyers in the Prescott area?  I think it is.  Sellers can be assured that if they price their home correctly, it WILL sell.  And buyers, especially in the “under $400k” price range can have some confidence that they won’t lose a bunch of equity, although they still need to view their home purchase as a “long term” investment rather than a short term vehicle to increased wealth.  The caveat for buyers to watch for right now is interest rates.  What small price reductions remain may not offset future increases in interest rates.  If you’re thinking of buying within the next six months to a year, be sure and keep an eye on the rates.

With real estate, timing is everything.  But so is making a smart housing choice that results in a wise investment for future resale and especially a wonderful and enjoyable place to call “home” for the next few years.

 Till my next blog . . . Gretchen

Coming soon ~ a few comments about the economy, mortgages, and how real estate will be affected.