The April 2008 Prescott area housing reports are out.  (See graphs below.)  While the reports do confirm that home sales in the Prescott tri-city area are up slightly, I must admit I am disappointed that the upward trend in sales is almost negligible.  

It is difficult to pick out the bright spots in the current housing report, but there is a glimmer of light.  While Prescott home sales remain flate, notice that sales in Prescott Valley and Chino Valley have picked up fairly significantly.  This would appear to be directly related to a drop in prices.  The median home price dropped substantially in Chino Valley and sales picked up quite dramatically.  Prescott Valley saw their median home price drop in March, and that seemed to spark sales there.  In April the median home price in Prescott Valley rose, so it will be interesting to see if sales are sustainable despite the rise in the median home price.  Prescott home sales remain very slow compared to April 2007.  I am looking for some possibly significant price reductions in Prescott by October 2008 as more sellers decide to “price to sell” after waiting six months or longer with no offers.

I don’t wish to highlight the negative, but one cannot ignore the increase in inventory.  Many Prescott area home sellers listed or relisted their homes in March and April, thinking that Spring is the optimum time to sell a home.   Unless buyer activity picks up enough to maintain or reduce the current level of housing inventory in the Prescott area, then I don’t think we’ll “hit the bottom” until late 2008 or sometime in 2009.

There is much confusion about the national housing market right now, and we are seeing conflicting reports, with some “experts” giving some indications that we might be nearing the end of the housing bubble while others are calling the Arizona housing market a “depression”.  Look for my next blog about these recent articles.

 And, now, here are the latest housing statistics for the Prescott area real estate market:

Prescott really is one of the most unique communities in the state of Arizona.  From its historic downtown and one-of-a-kind eateries to modern office buildings and shopping areas, Prescott seems to strike a chord with people relocating from Alaska, the East Coast, West Coast, and everywhere in between.

 Consider Prescott’s size.  Yes, Prescott proper is only about 35,000 to 40,000 population–small enough to have that “neighborhood” feel, but large enough to offer a variety of shopping and dining venues, especially if you include Prescott Valley and surrounding communities.

Then there’s Prescott’s unique topography.  Do you picture yourself living in a rustic stone, cedar, or log home surrounded by tall pine trees?  Welcome to neighborhoods such as Mountain Club (est. 1920’s) and Rancho Vista.  Or perhaps you prefer a southwestern home that offers a location that’s a combination of pines, boulders and views.  Then areas like Forest Trails, Hassayampa, or Cathedral Pines might intrique you.  Do you like a little more elbow room?  The Williamson Valley corridor with lovely ranchettes nestled at the base of Granite Mountain may inspire your inner cowboy spirit.

Because Prescott is such a unique town with so many hidden neighborhood gems, I find that many of my clients are drawn to a particular neighborhood or distinct topographical area of Prescott.  As their agent, I’ve discovered that once we’ve narrowed down the location that is most appealing, then finding the right house is the easy part.

Thinking of relocating to Prescott?  Let me help you discover this unique and wonderful town.  Email me at Gretchen@MyPrescottHome.com.  There’s nothing I like better than helping folks find the neighborhood that awakens their senses and soothes their soul. 

Well, the March numbers are in, and it’s not a pretty picture.  (Check out the graphs below.)  Of course, the March statistics reflect February contracts that closed in March, so hopefully April’s stats will be much improved as move into Spring.

It’s not all bad news, though.  In visiting with other real estate agents, mortgage lenders, and escrow officers, I’m hearing that the number of contracts is increasing.  So that’s the good news.  Unfortunately I must confess that there’s a downside in the current trends, and that’s a continuing backlog of inventory. 

Many homeowners were waiting for spring to list/relist their properties.  Because of that, we are still seeing new listings hitting the MLS at about 3:1 or 2:1 ratio compared with “solds” and “pending sales”.  So, despite increased buyer activity, we are not depleting the excess inventory.

The other trend to note is price reductions.  As you look at the chart of March sales, you’ll note that Prescott Valley had an increase in the number of homes sold.  However, please compare that to the hefty drop in Prescott Valley’s median home price.  Obviously, as prices come down sales go up.  Therefore I’m anticipating that we will see further price softening to stimulate buyer activity.  And the fact of the matter is It Works!  I know it’s a bitter pill for sellers to swallow, but really smart sellers and their agents will price aggressively at the outset rather than chasing a falling market.  Pricing right can save a seller thousands of dollars by getting a relatively quick sale now versus a much lower contract price months down the road.

If you would like to visit with me about the local housing trends and sales strategies, please give me a call at 928.533.3698 or email me at Gretchen@MyPrescottHome.com.  I always enjoy talking about current real estate trends.

If you find the possibility of  buying a “property in foreclosure” a little confusing, you’re not alone.  The process will vary from state to state and from lender to lender, and not all stages of foreclosure are an optimum time to purchase, either.  My intention with this post is to clarify the general stages of foreclosure and help buyers to realize what “buying a foreclosure” entails and when there may be a bargain in the process.  So here’s what is typical in Northern Arizona.

1. Owner gets behind on mortgage payments. Oftentimes the owner has purchased the home at the peak of the market with 100% financing and possibly an adjustable rate mortgage and can no longer keep up when the ARM resets to a higher interest rate.  Other times an owner may be behind because of a job layoff. He has maybe moved to another state with a new job and has simply “walked away” from his house.  Once in a while the owner has fallen on hard times due to illness or job loss and is still living in the house but having difficulty making monthly mortgage payments.
2. At this stage, some owners will try to sell their home. The problem is, most times (if the financed 95% -100%) they can’t sell their homes and clear enough to payoff their mortgage and back payments, liens, and delinquent taxes.  If the home is worth less than the equity in the home, then this would be the “short sale” phase, and a lender would have to agree to accept less than what’s owed on the house. While some lenders will agree to a short sale, others will not. Oftentimes a buyer won’t receive an answer from the lender for 60 days or more.  While a buyer might be able to get a bargain at this stage, it takes a lot of patience.  Lenders may take as long as 90 days to decide whether or not they’ll agree to your offer and the short sale.  Also the current owner must be able to prove “hardship” and be willing to supply mounds of paperwork to the bank in a “short sale packet”.  The lender will also require an appraisal or a BPO (Brokers Price Opinion) to determine the current market value of the home as compared with the offer.
3. If the house is worth more than what’s owed on it, then a buyer might purchase it outright at this stage — however somebody (either the buyer or the seller) will have to be willing/able to catch up the back payments, fees, taxes, etc to bring the house out of foreclosure in order for it to be sold. Obviously an owner who’s in default on his mortgage won’t have the means to do this, and it would be very costly to the buyer to do this.
4. If there’s been no offers on the home within the default period, the house is finally slated to be auctioned off “on the courthouse steps” as a Trustee’s sale. A buyer could purchase the house at this point. However, most banks have a pretty high reserve set or will keep the house vs let it sell too low. A buyer would need to have cash in hand to buy at the auction, and he also runs the risk of major problems with condition and title. He’ll be purchasing the home “as is” with no inspection period and he may find that he’ll have to pay delinquent taxes or other liens in order to obtain a clean title to the house. So it’s not without risks to purchase at this point.
5. If no one purchases the home at the Trustee’s auction, the lender keeps the house and now owns it. The lender cleans up any title conditions. A buyer who purchases at this point is still purchasing “as is” but retains the right to inspect (and cancel the contract if the inspection shows major condition issues). At this point, a buyer might get a bargain, but that’s not always the case. Sometimes lenders list their properties at or above market value, hoping to recoup some of their losses. Eventually they lower the price when there are no offers, but this might take them a while to figure out they’re priced too high. Other times (and in areas with lots of foreclosures) they’ll price aggressively at the start and will look at any reasonable offer.

One of the most important ways to get a “deal” on a home in foreclosure is to work with an agent that really knows the market and whether or not this is a true bargain.  I will help research the mortgage history of the home and run “comps” as well as help you evaluate the price and potential of the property.  I feel it’s very important that I stay up with new bank-owned listings and inform my clients immediately when a “bargain-priced” one hits the market.  Even in this slower market, the true bargains will go quickly.

 If you’d like more information about how to get a great deal when buying a home, please email me at Gretchen@MyPrescottHome.com.  I always love to find bargains for my clients!

It’s a good news, bad news scenario with the Prescott real estate market.  The good news is housing inventory is shrinking.  That’s good news for sellers who currently have their home on the market.  The bad news is it will probably mushroom again in early spring.  That’s good news for buyers planning on relocating next year.

And it’s good news, bad news when it comes to prices, too.  The good news for sellers is that the median home price is back above $300,000 ($320,000 to be exact - it had dipped to $295,000 in September.)  The good news for buyers is that the 2007 median home price has dropped to the same level it was two years ago.

Prescott remains tops on lists for Best Places to Retire.  Most recently U.S. News & World Report named Prescott in their October 2007 article.  Check it out!  http://www.usnews.com/usnews/biztech/articles/070920/20retire.prescott.htm

There’s much confusion about how to get the best deal when purchasing a home.  And some buyers assume that they’ll get the best deal by calling the agent who’s name appears on the “For Sale” sign.  In reality, though, you’re probably apt to pay more in such a circumstance.  Here’s why:

The listing agent always represents the seller of the home.  That agent was hired by the seller to represent his interests and negotiate the best price for his home.  When an unrepresented buyer wants to purchase that home, the listing agent will usually offer “limited representation” (sometimes called dual agency) to both the seller and the buyer.  In such a situation, the agent will deal honestly with both parties but will not be able to give either party an unfair advantage over the other.  The agent will not be free to “negotiate the best deal” for either one.   Of course, in previous conversations, the agent and his seller have discussed pricing strategies, etc.  However the buyer has had no previous consultations with the agent so he’s pretty much left to determine a “fair” offer on his own.

 Now, consider what happens when a buyer sees a house he likes and hires his own agent to represent him.  There is still no cost to the buyer; however much is gained by doing this.  First of all, his buyer’s agent will run “comps” on the property he’s thinking about buying.  The agent will also likely take his client to look at other homes that are similar.   This gives the buyer the opportunity to “comparison shop” and see what he can get for his money.  When a decision has been made, and it’s time to make an offer, the buyer and his agent will discuss a negotiation strategy and a prudent offer price.  The buyer’s agent will then present the offer and negotiate the best possible price for his client.

 Working with buyers is something I really enjoy as a real estate agent.  Even though purchasing a home is usually one of the biggest financial decisions a person can make, it doesn’t have to be a time consuming and stressful event.  Instead, I like my clients to view it as an adventure to be taken with the help of a knowledgeable guide.  It involves a lot of work on my part, but it’s one of the most fulfilling aspects of being a realtor - helping my clients to find that very special house they can call ”home”. 

How often I hear that question.  And how often I hear, “We’ll just wait until Spring to put our house on the market.” 

 I think everyone is just a little surprised at how pervasive and long-lived the housing slowdown has become.  Last year, and even early this year, most experts were predicting a “soft landing” and slight to moderate price corrections in a few areas.  Now it’s looking like it will be a while before we see a significant change in market conditions, especially in some regions of the country.  What about here in Prescott?

Prescott prices have softened somewhat, and Prescott Valley is seeing some significant price reductions at present.  Many nice homes have been on the market six months or longer.   And many sellers who don’t have to sell their homes are taking them back off the market and waiting until Spring to relist.

 Personally, I’m a little concerned about what we’ll see in the Spring.  Right now, new listings have definitely slowed, which is a good thing, allowing for a better absorption rate (at least for a while).  I worry, though, about a large glut of inventory in the Spring as sellers relist and new sellers try to sell for the first time since the slowdown.  Also, more sellers will be backed into a corner and need a quick sale by Spring.  The combination of more inventory and more motivated sellers equal some additional price drops into mid to late 2008.

Of course, only time and hindsight will tell us when the market has bottomed out.  I look for our market to improve as the Phoenix and Southern California markets improve.  Prescott will not suffer as badly as Phoenix, but many of our buyers come from Phoenix and Southern California, so we’ll probably not see a huge influx of buyers until those markets pick up.

Many people from all parts of the country are wanting to relocate to Prescott.  Unfortunately, either lack of high paying jobs here, or else a home to sell there, are keeping many folks from being able to follow through with their plans.

Considering Prescott as a relocation destination?  You’re not alone.  Prescott was named by Money Magazine (October 2006) as one of the top five places to retire.  Why?  Great weather, quality of life, and low taxes, among other things, put Prescott on many folks’ list of places to consider.  So what are some of the things you can do to see if Prescott is right for you? 

Step 1 - Check out some of these online sources:  The Prescott and Prescott Valley Chambers of Commerce, The Daily Courier Newspaper, City-Data.com.  On my website you’ll find several helpful relocation links:  www.MyPrescottHome.com/links  By looking into these sources you can decide if Prescott has the specific things you’re looking for.

Step 2 - Request a Prescott Relocation Packet from me: www.MyPrescottHome.com/relocation  Let me know your specific interests and I will include that information, along with other general information about the area.

Step 3 - Familiarize yourself with area home prices.  My easy to use MLS search page allows you to search all the active listings in Prescott, Prescott Valley, Chino Valley, and surrounding areas.  I don’t require you to register in order to use this search feature, so feel free to look to your heart’s content.  Why not give it a try?  www.MLSPrescott.com

Step 4 - Email me or give me a call with any questions you may have.  I’m happy to answer questions about anything from “Where are the best places to eat in Prescott?” to “Where can I buy a new 3-bedroom, 2-bath home at the best price?”

Step 5 - Come for a visit.  Stop by my office for a cup of coffee and a friendly conversation about your relocation concerns.  Maybe you’d like a tour of the areas or to look at a few homes to get a feel for “what you get for the money” in Prescott.  Or maybe you’d just like to have an initial consultation.  Whatever your needs, I’m here to help.

Step 6 - If you decide Prescott is right for you, together we can set up a “game plan” to make your move here as stress free as possible.

Step 7 - Welcome to your new home!

The latest housing reports are more than a little scary. http://news.yahoo.com/s/ap/20070827/ap_on_bi_go_ec_fi/economy  Does this mean that we should all panic?  Absolutely not!  However it is a time to exercise caution, especially for sellers and buyers in certain situations.

Sellers - If you don’t have to sell your home right now and can wait for the market to pick up, it will definitely be worth your wait.  On the other hand if you will be needing to sell within the next year, it may be better to get your home on the market now rather than later.  If you do need to sell, be prepared that your home will not sell for what it would have last year, and also be prepared for it to take a lot longer to sell. 

Here in the Prescott area, we have seen some softening of prices over the past year.  Median Home Prices in Prescott  A homeseller can expect a minimum of 4 months to sell his home even if it’s priced in the bottom 1/4 of comparable homes on the market.  Only homes prices significantly below market value sell within a month.  Average Days on Market

Bottom Line for Sellers:  If you do need to sell, be prepared that your home will not sell for what it would have last year, and also be prepared for it to take a lot longer to sell.  If you are selling your present home in order to move into another home in the Prescott area, rest assured that any price reduction you have to make when selling will be returned when you purchase your next home.

Buyers - It definitely continues to be a stong buyers’ market in the Prescott area. Buyers Market in Prescott  It is an ideal time to buy if you’re a first time homebuyer, or if you are looking to trade up within the Prescott area.  Also, people relocating or retiring to Prescott from other areas of the country where the housing market is comparable or better than Prescott’s housing market will find that they have many nice homes to choose from in the Prescott area.

Cautions for Buyers:  If you’re a first time homebuyer or need 100% financing, you’ll want to plan on living in your new home for at least 2 to 3 years.  It would also be very advantageous to purchase a home that is priced below market value.  By doing these two things, you should be able to offset any continued slide in values, thus ensuring that you have equity in your home when it comes time to sell in the future.

Also, now would not be the time to do a “fix and flip” or buy a home as an investment for a quick appreciation in value.  Only by purchasing a home that’s priced significantly below market value and selling quickly can an investor hope to pocket any profit.  While the present real estate market can be intimidating during times like these, you can maneuver the waters with confidence when you work with a knowledgeable agent who understands not only the local Prescott market but national indicators as well.

Despite a few surges in home sales in the Prescott area, the general trend over the past year has been relatively flat.  The median home price in Prescott has fallen from January of 2006 at $367,000 to $310,000 last month.  Prescott Valley median prices have remained flat over the past year and a half at about $220,000, and Chino Valley has seen a couple peaks, but mostly valleys with the median home price being comparable to Prescott Valley.  Also the average Days on Market remains at about 120 to 180 days, with many homesellers becoming discouraged and taking down their For Sale sign to wait for the market to pick up.

 The biggest indication of our strong buyers market is the number of homes available versus the number of homes sold.  Currently there are over 3,700 homes on the market (compared with 1,835 in Jan. 2006) and only 170 homes sold last month.

How do these trends affect you personally?  Is this a great time to buy or should a person wait?  What if it’s imperative that you sell your home as soon as possible - can it be done in this market?  I’ll talk about these topics in my upcoming blogs.