Sales rise, but foreclosures and short sales drive prices further down
Home sales in the Prescott area are a mixed bag.
Homes sales are up, but so are the number of short sales and bank-owned properties.
A comparison of sales in Prescott, Prescott Valley, Chino Valley and Dewey-Humboldt shows that real estate agents sold a total of 4,150 homes in those communities from January through November in 2009 and this year.
Of those transactions, 1,910 were short sales or bank-owned properties.
Still, two local real estate agents see some encouraging signs in the local market.
Pete Weaver, associate broker at West USA Realty of Prescott, said he thinks the market has hit the bottom.
"I believe we're at a point of stabilization in our market," he said. "Even though foreclosures and short sales are still there, still a significant part, I think those properties have driven our prices down to what I consider to be very close or at the bottom of this cycle that we're in. And I think that in the next year or two we will see a very slow increase in list and sales prices."
Realtors sold 1,870 homes in the four markets through the first 11 months of 2009, and those properties sat on the market an average of 166 days.
The average sale price was $215,361 and the average list price was $229,392 in 2009.
Of those sales this past year, 144 of them were short-sale properties and 599 were bank- owned.
Through the first 11 months of this year, real estate agents sold 2,280 homes, and those properties sat on the market an average of 149 days.
The average sale price fell to $194,617, and the average list price fell to $205,805.
Short sales account for 219 sales, and real estate agents sold 948 bank-owned properties this year, meaning that more than half of the sales were distressed sales.
The spike in bank-owned and short-sale properties had the counterbalancing effect of driving prices down and bringing buyers to the market, Weaver said.
Paula A. Smith, Realtor and president of the Prescott Area Association of Realtors, said short sales aren't selling because buyers are waiting until those properties become foreclosures.
While Smith sees that half the market is distressed, she said inventory and average days on the market are down, and those factors are helping property sales with asking prices the market previously saw roughly nine years ago.
Smith also said lenders are strict and their requirements are tight, but they are lending to buyers.
"It's a great time to buy," she said. "I feel that people are not as nervous about buying. Now they feel a little bit more confident that the interest rates are historically low and it is a time to buy, so they are making the decision."
Weaver believes foreclosures and short sales will stabilize or start to fall this coming year, and he's predicting a modest market recovery.
"I think we're going to see somewhat of a recovery moving forward, even though I think it will be very, very slight until we burn off the distressed property inventory," he said.