2023 has started on a very positive note for Prescott area real estate. Geoff Hyland explains more in his latest market update.

Happy New Year to you. I hope you and your family had a wonderful holiday season.

Inventory levels of homes for sale went up in our area in December, which is the opposite trend to what we normally see at that time of year.

I am happy to report that in January that number has fallen quite drastically. If you recall, we rolled into December with 784 total active listings. We then rolled into January with 608. That's a 29% decrease in terms of the number of site-built single family homes on the marketplace. So the inventory level is continuing to trend down. Based on historical absorption, we are back down to a three month supply, so we'll continue to monitor that for you.

As far as demand is concerned, interest rates were high in November and since then they've been coming down a little bit. So, believe it or not, we've seen an uptick in activity in the past couple of weeks and I'm pleased to say that we are pending a lot of listings right now with a lot of buyers coming into the marketplace.

Some of this activity might be in anticipation that there's a window of opportunity right now, with interest rates coming down a bit and the expectation that they will supposedly go back up at some point this year, but that's yet to be seen and we really don't know.

A lot of people have asked me what I expect for the market.

My answer is that I expect to see a direct correlation to what happens to interest rates. In November, when rates were in the mid 7's, a lot of buyer activity was diminished. If rates continue to stay where they are right now, I think we are just transitioning into a normal market and, with just three months of inventory, we are still argubly a little undersupplied.

So there are great opportunities for buyers and sellers too, as there isn't a lot of competition in the marketplace.

For some context, 201 escrows were closed in the Greater Prescott area during December, compared with 317 in December 2021. That is a 46% decrease year-on-year.

If you have specific questions about rates and mortgage programs and how they pertain to you, I would encourage you to call our in-house lending partner - Elevated Mortgage at elevatedmortgage.com - Our loan officer would be happy to have a conversation with you and help to get you prequalified in advance of going out and looking at some homes.

For any other questions you might have, I am always available. Please feel free to visit our website at prescottareaproperty.com or call me direct at 928-237-4425.

Best wishes,
Geoff

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