Forest Trails Prescott AZ Home Prices Moving Up!

2012 Prescott AZ Market Predictions

This recent blog from Keeping Current Matters, aka KCM, is spot on in describing our local Prescott AZ real estate market.  While I use the blog verbatim, I have inserted my observations in CAPITAL LETTERS regarding our local market at the end of each point, as real estate is local.

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.

BUYERS HAVE RETURNED IN FORCE TO OUR MARKET AS SALES ARE UP 1% IN THE LAST 6 MONTHS (DUE TO SEASONAL CYCLE) AND 15.7% YEAR OVER YEAR.

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

A SLEW OF BPOs HAVE BEEN ORDERED AND EVERY INDICATION POINTS TO MORE FORECLOSURES COMING ON THE MARKET SOON.

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

§ They will eat up some of the buyer demand in the market.

§ They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

DISTRESSED INVENTORY ONLY MAKES UP APPROXIMATELY 15% OF OUR PRESCOTT MARKET BUT ACCOUNTED FOR 34% OF RESIDENTIAL SALES IN 2011.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.

MANY BUYERS PURCHASED SECOND HOMES IN PRESCOTT DURING "THE BUBBLE" AND THEY ARE MAKING THE STRATEGIC ECONOMIC DECISION TO EITHER WALK AWAY OR PURSUE SHORT SALES.

5. Great Agents Will Be VERY Successful

Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.

THOUGH NOT UP TO MY 2010 5 MILLION IN SALES, THIS PAST YEAR'S 4.1 MILLION IN SALES IS PROOF POSITIVE THAT I AM SERVING MY CLIENTS WELL AND PROVIDING VALUE TO THOSE WHO WISH TO BUY OR SELL PRESCOTT AREA HOMES AND PROPERTIES.

2012 Prescott AZ Market Predictions

A Blessing to All, Always

Many Unitarian Universalists Congregations, including Granite Peaks UUC here in Prescott, Arizona, have as part of their service the Children's Connection.  It's a time when the children and young adults join together and are read or told a story or share their own stories with the congregation.  The adults then form a bridge across the aisle with arms out stretched and hands linked above the heads of the children and we sing them out with this cherished song (I apologize for not knowing the author):

GO LIFTED UP,

LOVE BLESS YOUR WAY,

MOONLIGHT, STARLIGHT

GUIDE YOUR JOURNEY INTO PEACE

AND THE BRIGHTNESS OF DAY

I can think of no better words to live by and extend this blessing to you as

A Blessing to All, Always

Are You Feeding Your Referral Machine?  This Prescott Realtor Is!

I just returned from a well-attended annual holiday party, a ladies tea attended by a lively and creative group of Prescott women.   I accompanied my Mom, an octogenarian, at this afternoon gathering as I had met many of these interesting and vital women from her and my Dad’s connection with them over the years.

One of the party-goers is a past buyer client of mine who made a point to ask me:  “Do you remember what happened here at last year’s party?”  As my mind raced to recall, she reminded me that I put the final touches on a deal in negotiation for the purchase of their new home.  That’s right!  I remembered that I’d received the expected seller’s counter offer, wove through the crowd to seek my buyer’s response, confirmed it with her husband, and had an accepted contract before the party was over.

She was beaming as she reminded me of this event, which still tickles her immensely a year later.  Her smiling eyes made me feel appreciated and satisfied and in that vein I began looking at the crowd more attentively through my realtor’s eyes to determine the number of my home purchases and sales in the last 2 years which were represented at this party. 

#1 & #2)   The party was being hosted by a couple whose home in the Prescott mountains I listed and sold while assisting them in finding their now Prescott home, the site of the party. 

#3)  One of the party goers was half of the couple that bought the above mentioned home in the Prescott mountains.  I served as dual agent in that transaction.

# 4)  Then, of course, was the other buyer whose deal was sealed the year before. 

#5, #6 & #7)   Another dear friend in this wonderful group had passed away earlier this year.  I had listed and sold her home in the Prescott mountains and assisted in her purchase of a home in the flats here.    I just listed and sold that home through her Trust this Fall.

#8)  Just as I was preparing to leave, another couple arrived whose second home in Prescott I had listed and sold just a month before.

Well, let me tell you, this amplified what I already knew... the importance of serving your clients well to create a referral machine. 

Indeed, my friends/past clients in transactions #1 & #8 inquired about future purchases during the party and the buyer of listing #5, whom I did not represent, has contacted me regarding another purchase.

Confused?  I’m not.  I will touch my SOI and past clients each in some way 20 times during the year to keep this steady stream of business flowing my way.

Are You Feeding Your Referral Machine?  This Prescott Realtor Is!

NICHE MARKETING IN PRESCOTT ARIZONA

Niche marketing in Prescott Arizona is a real opportunity to reach out to buyers looking for unique homes.  Unusual homes may not have many lookers, let alone buyers, yet it only takes one buyer introduced to the right home to make a sale.

With that in mind I had the challenge of listing and selling a home with a full-fledged observatory in Prescott AZ.  Located on a hilltop adjacent to the Prescott National Forest in an area of dark skies, the  observatory is recognized  internationally as “The Prescott Observatory” and  has been the site of the “discovery” of well over 600 asteroids by my seller client. 

I recognized that, while the home was spacious, well appointed, with incredibly panoramic views,  it was the observatory that would ultimately attract the buyer.  So, how to reach that buyer client?  Of course I used the internet widely and advertised on-line with astronomy publications.  What I also did was locate the addresses of as many astronomical societies as possible and send them this postcard:

This card proved to generate more phone calls than did the internet advertising.  I received phone inquiries from Hawaii, Utah, Washington State, California, Washington DC, Utah, and from here in Arizona.  Indeed, buyers visited from several of these states!

I ultimately sold the home with observatory to a buyer from Utah who has made some incredible improvements to the observatory with the goal of furthering education in cosmology and astronomy.  Below is the Wikipedia entry regarding the Prescott Observatory:

Prescott Observatory (IAU code 684) was built by Paul G. Comba and is now owned and operated by Matt Francis. The observatory is located south of Prescott Arizona and is dedicated to the study of cosmology. Refurbished in 2011, the observatory houses a PlaneWave CDK 24 inch telescope with two Takahashi wide field refractors in the dome. There is a dedicated solar observatory that is equipped with a Lunt 152 solar telescope. The observatory also has a nano lab for cosmology research that is currently equipped with a JEOL 5800LV SEM (Scanning Electron Microscope). Prescott Observatory is an active contributor for the webcast organization SLOOH which is the premiere webcast organization for live celestial events.

It is the stated goal of Prescott Observatory to help further education in cosmology and astronomy by offering courses and time on the observatory equipment at no charge. These programs are scheduled to begin Fall 2012.

This has been my most unique opportunity in niche marketing in Prescott Arizona

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Traditional Prescott AZ Home Sales Dominate, Distressed Home Sales Rule

Socked in by snow, this Prescott AZ Realtor is taking this time to evaluate the influence of distressed homes, both short sales and REOs/bank owned home sales, on our local real estate market.   I specialize in the town of Prescott, so I will limit my statistics to site built single family home sales in Prescott 2011 year to date. 

The majority of homes currently for sale in Prescott AZ are "Traditional", Regular, Non-distressed homes.

However, traditional home sales in Prescott make up significantly fewer sales as investors, second home buyers, and first time home buyers snatch up the deals offered by distressed properties.  This is obvious as we look at homes pending sale in Prescott as of this writing.  While the inventory of distressed properties hovers around 15%, it accounts for 37% of the pending sales in Prescott.

This trend in Prescott Arizona has been consistent throughout 2011.  The first half of 2011 (Q1 & Q2) saw 38% of all sales from distressed properties.

Sales in the third and fourth quarters of 2011 to date show a rosier picture as 29% of all sales were distressed properties.  However, remember that 37% of pending sales are distressed properties.

Traditional Prescott AZ Home Sales Dominate, Distressed Home Sales Rule.

 While distressed properties do not dominate our Prescott AZ real estate market by shear numbers, they significantly effect sales prices and require those wishing to list and sell their homes to compete on price points.  

Prescott AZ Real Estate:  Average and Median Sales Prices INCREASED in November!

Amid all the doom and gloom of national home sales reports, Prescott Arizona is showing very positive real estate market trends with both average and median sales prices increasing from October to November.  While one month doesn’t prove a trend, it is heartening since November is traditionally a slower month for sales in the high country of Arizona because of the Thanksgiving holiday and our seasonal selling cycle.

Let me typify the Prescott residential real estate market with numbers, numbers, numbers before drawing some conclusions.

101 single family residences sold in November in Prescott

·         20% were bank owned/REO sales at an average price per square foot of $82.43

·         10% were short sales at an average price per square foot of $104.18

·         70% were traditional sales at an average price per square foot of $128.97

Note that ~14% of our current listing inventory is distressed properties yet they accounted for ~30% of the sales in November.  This trend is well established and will most likely continue through 2012. 

How were these homes purchased?

·         40% were CASH purchases

·         53% were cash to new conventional loans

·         3% were FHA

CASH is returning to our market as both investors and second home buyers are purchasing homes at discounted prices.

How do the market numbers compare with October 2011 and 2010 year to date?

·         New listings are DOWN 8.7% from October and down 11.4% YTD

·         Solds are UP 7.4% from October and 18.6% YTD

·         Dollar sales volume is UP 29.7% from October and 10.19% YTD

·         Average Sales Price is UP 20.7% from October and DOWN 7% YTD

·         Median Sales Price is UP 25.7% from October and DOWN 10.63 YTD

·         Average days on market is UP 24.7% from October yet DOWN 3.7% YTD 

Listing inventory is at the lowest it has been for years, days on market for sales is declining, and the absorption rate is just over 6 months!  All these indicators show a return to a more balanced real estate market in Prescott.  Yes, average and median prices are still declining due to the influence of distressed sales, yet sellers are pricing their homes to sell, buyers are buying, and pent up demand is evident here.  

This Prescott realtor is enthusiastic about our local real estate market and the fact that both average and median sales prices INCREASED in November bodes well for Prescott area home sales.  Its a great time to list homes in Prescott and a wonderful time to buy homes in Prescott Arizona.