We're going to start with some of the not so great news and then we'll also talk about some of the highlights that we saw here in the month of September.

First and foremost, inventory remains elevated. We have experienced near 11 year highs since June 1st. inventory as of October 1st was 1236 homes on the market. That refers to site-built single family homes in the entire Prescott area MLS. So that number really hasn't changed. June 1st we were at 1231, we got up to 1287 in July and now we're at 1236.

So the inventory remains near a ten year high and we had a total of 360 properties come on the market in the month of September.

Now, here is the good news. There were 291 closings for the month of September. You have to go back to March of 2022 to find a stronger month.

Obviously you've been monitoring and we've been talking about the interest rates coming down. So I think that is definitely a contributing factor and if you also look at the pending sales, it did slip a little bit last month. We got down to 278 compared to the 305 that we saw the two previous months.

Now if you look at that 90 day window - July, August and September - I had to go back to the fall of 2021 to find a 90 day period that had as many pending sales. And if you remember how crazy it was in the fall of 2021, that gives you some context.

So listen up buyers! If you are still wondering if now is a good time to buy, survey says it is.

Interest rates are at very affordable rates - 6.4%, 6.3%, 6.2%. If you're a VA or FHA borrower, we have some borrowers who, with some seller help in terms of concessions, are getting financing in the mid 5% range.

Take advantage of Number One, very high inventory levels and Number Two, the fact that you've got some very affordable rates out there. Start looking for homes today and if you need help let us know.

Now, sellers, here's what I'm seeing. Since May 1st, values, at least in the Prescott market, have trickled down about 5%.

Last month, values in Prescott zip codes came down a little bit over 2%. Prescott Valley sagged by about 1.7%, Chino Valley came down about 6% and MLS-wide a little over 2% on average.

With values being a little bit more affordable as well as interest rates coming down, we are seeing buyers come out of the woodwork, which has been great.

A couple of other things to note here.

The Refinance Index kind of further substantiates the buyer activity that we're seeing. It tracks the number of refinance mortgage applications that we see on a national level. That has been vacillating between 18% and 22% higher than the numbers that we saw a year ago.

Now, when the Fed made the policy change, most recently, if you were paying attention to 30-year fixed mortgage rates, you probably saw that the rates increased and you wondered, well, why is that? Remember that there's anticipatory rate adjustments heading into a Fed announcement. Also bear in mind that 30-year mortgage rates are not tied directly to Fed policy changes.

So what happens is that there's anticipation of what the Fed policy change is going to be, then mortgage rates adjust. If you watch my video from last month, I warned you, hey, don't wait for the Fed policy announcement, talk to us now, because what we saw is that rates got down as low as 6.1%. Then the Fed policy change came out and they jumped back up to around 6.4%.

With all of that said, in the first week of October mortgage rates did drop. However, it was the third best week in three years!

Again, all of these factors are pointing to buyers having great optionality out there in terms of homes that are on the market. Values have come down a little bit, but it's not a runaway or anything like that.

If you really think about it, 5% since May 1st, it's not great. Don't get me wrong, but it's not like we're going into a depression or anything like that.

Days on market also continue to trend up. If you look at the charts, you'll see that they have been steadily increasing over the same time period of 4 or 5 months. Prescott days on market is now 89 days for homes that are going under contract. MLS-wide it's 87 days.

When you take a peek at the active inventory, we've got an average of 112 days on market right now and, although the average listing price of those homes has relaxed from where it was 4 or 5 months ago, those homes are, on average, priced about 13.5% higher than the average price per square foot in their respective market.

If you're a seller and you're struggling right now, not getting the showing activity, you might want to consider doing some refreshing on your advertising. You might want to refresh your ad copy, take a hard look at your photography. See if there's anything that you can do there and then take a look at what new properties have come on the market that you might be competing against and see if a price adjustment is needed, in order to breathe some new life into your listing and get it sold.

That's the market update for October. I appreciate you tuning in and we'll keep you posted next month. Thanks a lot.

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