Usually our inventory peaks in either August or September, but this year could be a little different.

In August we had 806 properties, in September it inched up to 830 and was at 828 on October 1st, so right now it appears to be fairly stable and we'll keep you updated with what happens for the rest of October.

In terms of demand, unsurprisingly, due to interest rates rising again, our overall pending properties that went under contract in September fell by about 17.5%, compared to the same month last year.

As you can imagine, as the interest rates go up, it's going to edge some buyers back out of the marketplace, or they'll just continue to wait to see what transpires.

When we look at our overall supply of homes, relative to demand, we have about 15 weeks of supply. This is still slanted slightly in favor of the seller. Normal inventory is between five to seven months of supply.

So what happened with values?

This was somewhat counterintuitive. In Prescott we saw a 6.8% increase in values and I'll return to this later. Prescott Valley softened by 1.7%, Chino Valley had a slight uptick with some larger properties that sold out there. MLS-wide, we saw a 4.2% increase in values.

Homes that sold within Prescott sold within 2% of their asking price. Homes in Prescott Valley sold within 1%, so sellers received 99% of their asking price.

Average days on market before a home sells is staying fairly stable. MLS-wide, we are looking at 47 days, in Prescott it's 57, Prescott Valley is 35 and Chino Valley is at 44.

Last month we talked about active inventory. Currently all site-built homes on the market are still sitting at 109 days on the market. The key point there is that the average list price per square foot for all active inventory is $346 - that's 7.5% above the average price of homes that are selling. So price could be an issue there.

What are we seeing in the marketplace?

As we entered October, interest rates went up yet again. Any time that the Federal Reserve announces rate increases - not a direct correlation with the interest rates on your mortgage - it's not uncommon for buyers to jump into the market expecting that rates will only get worse and we see a little bit of a run on the market. Unfortunately what happens after that is, a lot of times, rates come back down.

When you look at Prescott sales increasing by 6.8% last month, there were 17 homes that sold for over a million dollars at an average of $492 per square foot, which represented about 20% of the homes that sold last month and dragged the average up.

If your home's worth over a million dollars, before you think your home is worth $492 per square foot, keep in mind that there are currently 135 of those on the market and they have been on the market for 189 days.

Every home and location is different. There are so many factors, so if you have a question about your home value, please feel free to reach out to us.

When you take out the million dollar-plus homes that sold in Prescott in September, there was about a 4.7% increase on the sub one million dollar market.

We are also seeing that new homes have slowly started to increase production, which should contribute to inventory and perhaps better affordability for our buyers.

Right now there are some local builders offering wonderful incentives to buy down your rate, so if you have any questions about that please reach out to us.

According to Zillow, about 9.2% of all the active inventory on the market reduced price in the third week of September. Another report said that, nationwide, 17% of home sellers came down on their price.

If you're a buyer, keep in mind that there's more inventory than we've had in the past three years, sellers are more willing to work with you on either repairs or concessions and chances are you might be able to find a seller who will give you help on interest rates to bring your rate down as much as a full percentage point.

If you have any questions at all about the market or don't know what to do, please reach out to us on 928-237-4425.

Have a great day,

Geoff

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