Yippee for Prescott, Ariz. – it’s on the list of U.S. cities with improving real estate markets, according to the National Association of Home Builders. Of course, those with the boots on the ground – real estate agents in the Prescott area – have known this since the beginning of the year. But it’s nice to know that the word is out.
If you’re in the market for a Prescott home, however, inventory is pretty tight right now. You’ll find:
- 281 homes priced below $300,000
- 162 priced from $400,000 to $599,999
- 142 homes in the over-$600,000 range
Most Competitive Segment
Although the market has especially heated up in the under-$190,000 price range, “anything below $300,000 is hot right now,” according to Dave Conners with Keller Williams Realty in Prescott.
The frenzy to purchase in the lower price ranges has shrunk inventory. “Our inventory overall is half of what it was two years ago and continues to decline,” says Conners.
Arizona seems to be leading the housing recovery, according to many experts, with multiple offers and escalating prices. “We’re absolutely seeing multiple offers in Prescott,” claims Conners, “It’s especially prevalent with homes that are priced at or below market value. On those, it’s not at all unusual to see three or four offers.”
Unlike other fast-moving Arizona housing markets, Prescott isn’t seeing an influx of investors. Conners’ theory is that “investors got what they wanted about two years ago and now probably represent no more than 10 percent of the buyers in the Prescott market.” Most of the sales, he says, are going to people relocating, especially from the Midwest, Phoenix and California.
Distressed Real Estate in Prescott
The distressed home market seems to be drying up in Prescott as well, with REOs accounting for 31 percent of June sales while short sales only garnered 11 percent of the sold home market, according to a Windermere Market Report for the greater Prescott area.
“One of the biggest shifts we’ve seen is that we’re running out of bank-owned homes. Today we have 31 on the market whereas we had 75 two years ago, says Conners. “If you look at Trustee sales, the leading indicator of foreclosures, we peaked in June of 2009 at 415 a month. In June of this year, by comparison, we were down to a little over 200.
Conners feels that, because of that, Prescott isn’t likely to be a market deluged with the so-called “shadow inventory” of foreclosures. He also reminds us that, even the stubbornly high national unemployment numbers don’t have much bearing on the Prescott housing market. Since Prescott is a well-known magnet for retirees, “we’re skewed to an older demographic – folks that mostly don’t work.”
Many emerging real estate markets across the country are seeing a huge percentage of cash transactions because of investor interest. Prescott is no different as far as an influx of cash buyers, but it’s the retirees, not investors, who are responsible for one-half of all sales being cash transactions.
Conners says the Prescott real estate market picture looks rosy overall and that “the trend indicates continued improvement.”