I just want to wish you all a Happy New Year and hope you had a wonderful safe holiday season.

So let's dive right into our first market update for 2025.

First of all, inventory levels continue to decline.

Inventory of site-built single family homes in our MLS has now decreased to 821 homes. Based on our demand, what that translates to is a 3.44 month supply of inventory.

We always talk about what's normal, which again is that 5 to 7 months supply. So with the increase in demand that we did see in December, in terms of closings, that would take us to a 3.44 month supply. That is the lowest that we've seen since August of 2023.

As far as the overall inventory is concerned, 821 listings marks the lowest that we've seen since April of 2024 last year. So inventory levels are down. Some of that, of course, is seasonal. It's not abnormal for us to see inventory levels decrease on January 1st and then we anticipate, if history is any guide, that inventory levels will start increasing again in March and April as we go into the spring and summer markets.

There were a couple of interesting things about December. Demand, in terms of the number of homes that went under contract, was 153 and that's actually about a 24% decrease from the number of homes that went pending in December of 2023. So that was down. But the flip side of that is the number of closings in December was up by about 40% from where we were in December of 2023.

So an increase in terms of the number of closings, a decrease in demand in terms of pending sales

Something else that moved a little bit was days on market, which for the MLS overall average was 76 days. Prescott, however, jumped up to 92 days and it's been hovering around 60 days. So we'll keep an eye on that as we move forward into the year and keep you updated.

Of that inventory, 400 of those homes are in Prescott. When you look at the active inventory on the MLS, that 821 homes, they have been on the market for 134 days. So if you remember, over the last few months, it's been hovering at about 110 days on market.

Now the inventory of the active listings is at 134 days and they are priced on average about 15.5% over the overall MLS average sales price. If you wanted to look specifically at Prescott, same thing. The numbers are 13.6% higher. All the homes that are active for sale in all Prescott zip codes are priced 13.6% over what the average sales price was for the month of December.

So, how did we do year-over-year? It's always a question that our buyers and sellers are asking us

Basically, the way that I would describe 2024 from start to finish was a very stable market here in Prescott. So site-built, single family homes on an MLS-wide average was negligible change - less than 1%.

So, as we look forward to 2025, what can we anticipate?

The number one question that we get from our buyers and most of our clients right now is Geoff, what's going to happen with interest rates? So I went to the web and tried to get some some information to share with you.

Obviously, mortgage rates remained stubbornly high in 2024, despite a lot of our anticipation or hopes that they were going to come down.

The Fed has been cutting rates and that's been impacting things like borrowing for credit cards and auto financing and other types of loans. But the 30-year fixed mortgage rate, which of course is tied more closely to ten year Treasury bonds, has remained high.

So what we've done is looked at, basically five latest projections in 30 year fixed mortgage rates from the leading financial institutions, which include the Mortgage Bankers Association, Realtor.com, Fannie Mae, Wells Fargo and Goldman Sachs.

The overwhelming consensus is that, by the end of 2025, we're still going to be having rates higher than 6%, with the majority of those financial institutions predicting that rates will fall somewhere between 6.3% and 6.6%. So it does sound like some relief is on the way. Currently, right now here in January, we're at 7.07%.

I would anticipate by the end of 2025 that those rates are going to be coming down, but not into the fives like a lot of people were hoping for or anticipating. So, we'll continue monitoring and keeping you up to date.

Here's the message. Whether you're a buyer or seller, the market overall in the overall Prescott area MLS was stable last year. Not a whole lot of appreciation, not a whole lot of depreciation. We had some monumental changes in the real estate industry, including a lot of speculation about what was coming and then obviously we had a presidential election to contend with. The good news is that all of that is over and now we're in 2025.

So as we look forward, what I would continue to say is, if you're looking to sell, the best thing to do is look at what the value of your home is right now.

I would anticipate, based on these projections, that we could see another stable market here in 2025. And if you're looking to buy, if you've been sitting on the fence, waiting on the sidelines, waiting for those interest rates to get into the fives or any of those things, you don't know that's going to happen this year.

I can't predict the future, but I'm just relaying the information and the research that I've conducted. And here's the good news. There's homes out there for sale and a lot of them have been on the market for quite some time, which could open up some opportunities for you as a buyer.

And the other thing to remember is that, you know that old saying, you date the rate and marry the property. So if we can find you that house, that next property that's right for you and your family, I would encourage you to get out there, start looking at homes and then when the mortgage rates do come down and it makes sense to refi, we'll be right there with you to assist you in that process.

So that's the mortgage and market update for January 2025. Once again, Happy New Year. We're looking forward to a great year. And if we can do anything for you, please don't hesitate to reach out at any time.

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