I hope you had a wonderful 4th of July, celebrating our independence and freedoms here in this country.
The first thing I would say is that, despite what you might be hearing about in the national media, the market is not crashing, but I would say that it's definitely shifting.
The numbers that we're going to go through today, in my opinion, don't paint quite the accurate picture. I always talk about the fact that appraisers are looking in a rearview mirror. They're not really concerned with what's active in the marketplace and, to a certain extent, what we're going to talk about today will portray a similar picture, so I'm also looking at what I'm seeing on a daily basis in the market.
Let's talk about the numbers. We still have, a little bit more relief in terms of interest rates. In June interest rates were hovering at the 6.96% level. As of July 1st, they've come down to 6.67%, so we are seeing a little bit of softening in the interest rate environment.
On inventory, we are yet again at a ten year high, maybe longer. That's as long as I've been tracking the numbers on a monthly basis here in Prescott.
As of July 1st, there were 1287 site-built single family homes on the market. That is a high for the last ten years, maybe probably more accurately 11, maybe even 12 years. That marks a 30.66% increase in terms of inventory year over year.
I was on the phone with a couple of past clients this week and they said Geoff, we're kind of panicked. There's nine homes for sale in our neighborhood around the Williamson Valley area. Why is everybody wanting to move out of Prescott? I'm here to tell you it's not anything to do with Prescott. If you look at the national stats, inventory is up 31.5%. So we're actually just under at 30%. Negligible.
Another stat that I saw is that there are 500,000 more sellers than there are buyers on a national level. That's the largest gap, on record since 2013.
Buyers are, I think, feeling confident for the first time in a long time that this might be a good time for them to step into the marketplace. And while the closings in June were actually down year-over-year by roughly 12%, it's interesting that homes going under contract in June was up by 7.5%.
When you look at June 2024 compared to June 2025, you've got some softening interest rates and buyers have got more homes to choose from than any time in over a decade. The number of buyers putting homes under contract in the month of June is actually up year-over-year. With that little lower number of closings that occurred in June, that gives us a 6.22 month supply.
I often talk about a balanced market. On paper it's definitely a balanced market. I think that a lot of buyers out there are feeling like they're in the driver's seat and there's a lot of sellers out there that might agree with them right now.
Average days on market as of right now for Prescott is 62 days. Across the nation it's actually 51. So we are experiencing a little bit longer times here in the Prescott area. MLS-wide we are seeing an average of 63 days, 65 in Prescott Valley and 56 in Chino Valley. So we're above the national average in terms of days to sell a home.
If you're a seller, I'm here to tell you that there's good news out there. We saw a buyer uptick in terms of pending sales for the month of June. Buyers are recognizing that there's opportunities in the marketplace.
You also have to understand that being very proactive when it comes to price is going to help avoid reactive and deeper price cuts later on. So if you're not getting the traction, take a really strong look at the active inventory of what you're competing against.
I've been on multiple listing appointments in the last couple of weeks and if you are looking at homes that sold in your subdivision three, six, nine months ago, it is a very different marketplace than we're in today.
There's been two instances where there were comps that would support a $650,000 listing price, based on six and nine month old comps. Yet there are homes in that neighborhood that are currently listed at $575,000 and $550,000 and they're sitting.
So if you are trying to price your home, whether you're working with an agent or you're looking around, you need to be much more in-tune with what you're competing against for your buyer than what sold 6 to 9 months ago. If a home sold six months ago, that buyer put it under contract seven or eight months ago and this is a drastically different environment now than than it was then.
A total of 400 new listings came on the market last month. Typically our market peaks out sometime between August and October so, if history is any guide, we are going to see more homes coming on the market.
If you're a buyer, this is what you've been waiting for. Some people say, well, I'm going to wait for the interest rates to come down. Really take a look. I was on the phone with a buyer asking me this exact question. They read some stat that potentially by the end of the year, or early next year, they might go from 6.75% to 6.25%
On a half $1 million mortgage, that half a percent interest rates results in maybe $167/$175 a month. What I would be looking at is, if those rates come down to that level, you're probably going to see a lot of buyers out there that have been waiting for an opportune time to go out and they've been waiting for some price relief, or they've been waiting for lower interest rates.
I'll take the lack of competition in the marketplace that you see right now with an exorbitant amount of properties, a ten year high, over the $167 or $175 a month savings. When the interest rates are favorable enough, refinance. So find the home that you want, you don't have much competition in the marketplace. Most sellers are being very reasonable in terms of paying your broker to represent you. They're also receptive to concessions.
On the flip side of that, I don't want to paint the picture that, if you're a buyer, you can go out there and in every case make an offer that's, say, 3%, 5%, 8%, 10% below, because that is not the case.
When you look at the active inventory, it's true that, of the 1300 or so homes that are on the market, they're priced about 11% over the average cost per square foot.
Twice in the last week I've put listings on the market. We studied the market, we looked at the active competition and we priced it correctly in the marketplace. It resulted in multiple offers on both of those listings in under a week.
So if you're watching the market and you're a buyer, you'll know when a home comes up that's priced correctly. Oftentimes if you hesitate, they're still gone.
Sellers, there are still buyers in this marketplace that are looking for nicely positioned, nicely upgraded, good condition and priced correctly homes. You just need to focus on what your competition is to make sure that you nail the price.
That's about the the update for July. Things are changing daily and I look forward to talking with you again next month.
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