A lot of questions have been coming in lately about what exactly is going on in the market.

Fortune Magazine published an article recently that hit the nail on the head in my opinion.

We've been having buyers make offers on properties that have been on the market for the last 30, 60 or 90 days, in some cases, and haven't sold. All of a sudden buyers find a property at the top of their list and make an offer and in some cases it's not accepted because there is more than one offer on that property.

So the question is why? What's going on?

Well a couple of things have transpired in our market. Out of 29 national companies that do housing forecast models, 24 indicated that we should expect to see a decline in the market in 2023.

Now we've seen the market softening a little bit in the past couple of months, but something interesting happened last month.

Here locally in Prescott we saw all municipalities across the board actually show a slight rebound. Not a lot, I'm not willing to say it's a trend yet, we'll have to monitor that in the coming months. But, for example, Prescott went up by just over 1%, Prescott Valley 1% and Chino Valley, more volatile due to the lower number of sales, was up by 4%. MLS-wide we saw an improvement of 3.2%, the first increase in values that we've seen in several months.

Buyers are therefore asking why are we seeing multiple offers all of a sudden, especially on properties that have been sitting on the market for a little bit of time.

In my opinion there are two major contributing factors and the Fortune Magazine article also echoed those sentiments.

Affordability of homes has improved. 30, 60 or 90 days ago, when those homes came on the market, we were seeing interest rates over 7%, 7.35%-7.4% on average. More recently we are seeing homes lock in on interest rates somewhere in the mid-6% range.

But, as the affordability comes down on the homes due to the interest rates, the other factor is that our inventory hasn't really started to grow.

We began April with 550 homes, just 13 more homes from the numbers in March. If you go back a year as far as demand is concerned, in March we pended 228 homes. That's only down a little bit less than 14% of the homes that went pending in March 2022.

So affordability is coming down and the inventory is remaining very low and, all of a sudden, some of these homes that have been sitting on the market for 30, 60 or 90 days are seeing multiple offers. We are seeing it here on our team as well.

For the most current information on rates I'd encourage you to visit our in-house lender Elevated Mortgage and if you have any further questions about the market or there is any other way we can assist you, do reach out to us. We're happy to help you in any way we can - 928-237-4425.

Have a great day,

Geoff

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