The Real Estate View

...The Sky Is Falling! ...The Sky Is Falling!...

Did Chicken Little get it right?

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on't Look Now! If you've been reading the headlines lately, then you're probably very aware of the doom and gloom predictions for the real estate market. And then the rumors begin: "It will be impossible to get a mortgage!" or "This is only the beginning – foreclosures will increase and prices will continue to fall!" So what's a person a think?

First of all, real estate is very local. What is true in one location may not be true in another location. Case in point: While home prices have dropped and sales have slowed significantly in the Phoenix area, sales have continued strong in places like Portland, Seattle, and Albuquerque. Even Prescott has not been hit as hard by the slowdown as Phoenix has.

So what is the local market doing here in Prescott? Well, we're not out of the woods yet. I had optimistically believed that we would turn the corner by late summer or fall. Unfortunately, that has not happened. Prices remain fairly flat in the Prescott area, however inventory has steadily increased since the first of the year. Average days on market has also increased since last year. There is currently about a 16-month supply of housing inventory (meaning that at the current sales rate of 196 houses sold in August, it would take approximately 16 months for all 3,186 homes to sell. That assumes that no new homes come on the market and that the current sales rate continues.) So it all "doom and gloom" then?

Prescott's housing market has several positive things going for it. First of all, Prescott continues to see population growth. New jobs are being created and Prescott remains a relocation destination for many retirees. Prescott boasts great weather good schools, and a variety of activities that appeal to visitors and newcomers. Also, the Prescott area does not have a lot of new home subdivisions. This also helped us from having an even greater amount of housing inventory.

Advice for Sellers in the Current Market: If you don't need to sell, don't. However if you'll be needing to sell within the next year, it might be better to put your home on the market now rather than waiting until next spring or summer. There are apt to be even more homes hit the market early next year, and prices may continue to fall. Be prepared to wait at least 4 to 6 months for a sale, even if your home is in great condition and priced competitively. Right now, a relatively quick sale takes a meticulous combination of an extremely competitive price, a home in absolutely immaculate condition, and a REALTOR? with a great marketing plan. It all comes down to knowing the market extremely well and expertise in advertising, staging, and negotiation to get the job done.

Advice for Buyers in the Current Market: Now is not the time for quick flips. While there are bargains out there, it is very unlikely that you could purchase and resell immediately for a profit. Also, this is probably not the best time to do 100% financing unless you can purchase a home unless you're planning on staying in the home 2 to 3 years or longer. This will allow time to recoup any short term loss should the housing market decline further. Beyond those cautions, this is a buyers' market here in the Prescott area with lots of homes to choose from and many homes that are "real steals". Are you planning on relocating to the Prescott area? If so and you have a home to sell in another part of the country, consider whether your local economic conditions (i.e. jobs, growth, etc) lead you to believe your market will recover more quickly than the Prescott market. If not, you may want to sell now rather than later, as the gap will continue to widen between what you're able to sell your home for in your current locale and what you'll have to pay for a home in the Prescott area.

These are turbulent times in the real estate market. Always remember I'm here to help you navigate the murky waters. Give me a call anytime to discuss current market conditions!

For more information click on the Current Reports tab to request a free copy of these reports: 5 Important Questions to Ask When Interviewing an Agent and 10 Tips for Staging Your Home. And of course, I'm always available to answer your questions at 928.533.3698. Or click here to send me a message.