The first quarter of 2009 is thankfully over and we are seeing buyers starting to take advantage of the pricing in the real estate markets in Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt. Foreclosures and short sales have driven prices come down to levels seen before the "boom." Historically, prices have increased at a modest 3% - 5% range, and I would imagine that if normalcy comes back to the real estate market, we could anticipate similar growth in the future. We just have to cycle through some of this foreclosure inventory first.
Speaking of foreclosures, according to latest data from Zillow, the Prescott area averaged only about 4.1% in foreclosure transactions in the previous 5 years. For 2008, we averaged 23.9%!
| Zillow Prescott Distressed Sales Data | |||
| Time Period | Homes Losing Value (Pct) | Homes Sold For Loss (Pct) | Foreclosure Transactions (Pct) |
| Past 12 Months | 92.9% | 34.0% | 23.9% |
| Past 5 Years * | 4.4% | 7.1% | 4.1% |
To see the full report on Zillow
The Zillow data compares fairly closely with the Prescott MLS data below. On the listings side, there were 274 residential single family residence that were listed as foreclosures or short sales, about 22% of the total amount of listings on the market for Q1.
However, on the sales side, foreclosures and short sales made up 34% of the total sales. This is probably due to the 22% discount off of "retail price" that distressed home buyers are getting in the Prescott AZ area.
This discount is driving down the amount that tradional sellers are willing to take for their homes to 76% of their asking prices on average. Banks are getting 13% more, or 89% of their asking prices, on average.
The time it takes to sell a home is decreasing, but tradional sellers are having to wait a little over 6 months, or 92 days, and REO and short sales are taking about 4 months, or 124 days, on average .
(Replaced orginal chart with image)
Prognosis for Q2: Prices will stabilize at the low end and tradional sellers will continue to have to drop what they get to match the foreclosure comps that appraisers are going to be using. When homes don't appraise, buyers either get a discount or will walk most of the time.
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