We've got quite a few things to talk about.
Number one, we did see a little bit of a reverse in our inventory last month. It has started to slide down. Not too unexpected this time of year.
As of November 1st, we had 1149 site-built single family homes on the market. As you know, we've been hanging in the 1200 range since June. So we've come down off of that.
Right now we are sitting at about a four and a half month supply. Still pretty strong demand. 253 properties went pending last month and there were 258 closings during that period of time as well.
Interest rates are in the 6.25% to 6.35% range. Obviously, with FHA and VA, you can get pretty close to 6% on a 15 year home loan.
Pending sales for October of this year were up by nearly 6% compared to a year ago. So, with interest rates continuing to ease a little bit, we are still seeing really good buyer demand out there.
I talk to people all the time and they're saying the market's really slow. It's not really. There is a lot of buyer demand out there. There's plenty of transactions taking place.
If you look at 259 pending sales for the month of October, and compare it to, for example, May, when everybody's perception is that May/June is a great time to sell, well there were more pending sales in October than there were in May!
So the market is very active right now, with the disclaimer that your home has to be priced and marketed correctly. And you really do have to go the extra mile to set yourself apart, because there are more options for buyers to choose from in the marketplace right now.
Values in Prescott did slide by 2.98% last month. If you look at what's been going on since May 1st, the market in Prescott has declined by almost 8%. So sellers are getting more and more realistic in terms of pricing.
Active inventory has been on the market for 124 days on average, priced at 12.75% above the average price per square foot. So those active homes are continuing to languish because of pricing in most cases
Days on market, MLS wide, is running at an average of about 84 days for a home to go on the market and attract an offer.
When you start looking at those pending sales, a lot of times you'll see one, two or three price reductions during that time frame. So they're chasing the market down. Be careful about doing that. Everybody's really tempted to price high. We can always come down later. If you have questions about that feel free to reach out at any time.
Generally, what I see is if you price the home closer to market value in the beginning, it's going to net you as a seller more money, as opposed to chasing the market down, especially with the trend that we're seeing right now.
Prescott declined by 2.98% and Prescott Valley saw a 1% decline in the last 30 days. We're keeping an eye on that.
Now, there's a lot of talk in the news and I've been getting a lot of phone calls about these 40 and 50 year mortgages.
Let's talk about why President Trump is talking about or entertaining these ideas, which, by the way, is not new. These have been talked about in the past.
I read a stat that the median price of a US home in September was $415,200, which is 50% higher than September of 2019. That's why these conversations are happening.
The average first time home buyer is now 40 years old. Historically, it was closer to 26. So what they're looking at is, hey, how do we work on affordability to get more buyers to experience homeownership? And so that's why they're looking at it and there's pros and cons.
I'm not here to say what's right, what's wrong for you and your situation. It could be a really good fit for some people. The pros include lower monthly payments. It reduces that barrier to get into home ownership which, for a lot of first time homebuyers out there would be great.
Even for non-first time homebuyers, you can get into a house if you're expanding your family or want to move up, that lower monthly payment could be attractive. Obviously easier qualification. And there could be an increase in your purchasing power with possible increased buyer activity as a result of it.
Some of the cons could be you're going to pay a lot more money over the life of that loan and so that's where I'd be really careful. Can you qualify for a 30 year loan? You look at a 15-year rate versus a 30-year rate and there's oftentimes upwards of a half a percent difference. Well if a 30-year fixed rate now is running at 6.3%, I don't know what a 40-year rate is going to be. 6.7% or 6.8%? What's a 50-year rate? Are you over 7%?
If you take a look at your good faith estimate when you're sitting down with your lender and you say, what am I going to pay over the life of this loan? You're going to pay a lot more money. So keep an eye on that.
If they do this, we're going to have a ton of buyers come into the market and take advantage of this. If that happens, inventory, at least initially, could shrink. It might create some buyer frenzy and there's some speculation that prices could go up in that situation. I think really what that would depend on is how many buyers in the marketplace on a national level actually would take advantage of this and what that surge looked like.
So there'd be a little bit more long-term lender debt risk and you're going to be tied to a mortgage for a lot longer. There are some pros and cons in that.
The overarching question that I'm getting right now is that we're approaching the holidays and might interest rates come down again?
There might be another Fed update coming where we might get some more relief. We're going to wait and see, but let's just briefly take a look at some of the factors that could impact that could push prices up.
I surveyed a bunch of different articles. I looked at many different economists' economic outlooks and so forth for what we can expect in 2026. Well, if rates do go below 6% and they remain stable there and we have a steady job market and construction costs remain high, that can create a pricing floor. Those factors could push pricing up.
Factors that could push pricing down on the other side of this could also be taken into account, if we get a rebound in mortgage rates from inflation or market risk.
If rates go back up, we get a surge in listings. There's still a lot of baby boomers out there that are looking to make a move. They've been sitting on the sidelines for the last couple of years and, if rates come down to a more stable, acceptable level, we could see a surge of listings in the spring or another economic slowdown or rise in the unemployment rate.
I'm not here to predict the market. I want to make that loud and clear. I'm not qualified to do that. But the most stable scenario probably is that rates and inventory sort of balance each other out and the economy stays predictable with no major shocks or setbacks.
Government is opening back up which is great news and the majority of predictions are for mild or flat growth for 2026. So if you're a buyer waiting for the market to fall out or anything like that, I don't know if that's coming.
So that's kind of what I'm seeing. I would guess we're going to see a fairly flat, stable half a percent, 2%/3%, which would be a welcome turn for what we're seeing in Prescott, since May 1st.
So that is your November market update. If you want to give us a call to go through any of these things, take a look at what rates really are for you, talk about timing etc., we're absolutely here and would be delighted to go through that with you.
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