Originally Published: January 24, 2016 12:25 a.m.
In 2015, there was more than $1 billion in total real estate sales in the greater Prescott area, according to figures pulled from the Prescott Area Association of Realtors' (PAAR) Multiple Listing Services (MLS) system. About $963 million of those sales were solely residential.
This hasn't happened since 2006.
Right before the real estate crash in 2007, the real estate market was at an all-time high.
In 2005, total sales in the greater Prescott area reached their highest ever, topping off at more than $1.4 billion. In 2006, that amount was quite a bit lower but still breached $1 billion by about $56 million.
These figures include all sales (residential, vacant land, commercial/industrial, multi-family) excluding business opportunity, residential lease and commercial lease. The numbers provided by PAAR's MLS mostly come out of the quad-city area, but also captures transactions from areas as far as Paulden, Mayer and Skull Valley.
Brokers for real estate firms throughout Prescott agree that several factors played into last year being a "big year."
"What's driving growth is the stronger economy, strong property market fundamentals and interest rates are still reasonable," said Paul Aslanian, Designated Broker for Bloomtree Realty in Prescott.
Those factors can be applied to any market in the country, but the reason they specifically benefit the Prescott area is because Prescott is an increasingly popular living destination, said Don Bonnell, broker and owner of Realty Executives Northern Arizona.
"This particular area is very tied to other places," said Bonnell.
In other words, now that median home prices throughout the country have recovered substantially, homeowners who were stuck have finally been able to sell for a reasonable return of their initial investment and relocate to an environment with a temperate climate.
"We are a top retirement location," Bonnell said. "People tell us all the time that they don't want to live in 115 degree weather, such as in Phoenix or Southern California."
Additionally, Aslanian said the greater Prescott area market has shifted to mostly primary house buyers. So whereas people used to just be looking for a cabin in the woods in this area, they are now looking for their home base.
That total sales figure of more than $1 billion in the Prescott area last year is proof that demand for property here is high.
However, the number of real estate listings has been steadily declining since July.
"I think the people that really needed to sell have already sold," Aslanian said.
Of course, when demand is up and supply is down, this creates upward pressure on prices.
"It will be interesting to see what happens in the spring," Aslanian said. "If we see more houses come on the market, it'll balance with some of that demand. But if we continue to see this tight market and if the inventory keeps shrinking and the demand is still there, we'll see prices creep."
The median price of residential sales in the Prescott area has already been increasing at a significant rate. Since 2012, it's jumped more than 50 percent - 10 percent of which came last year.
If it continues at this rate for the next couple of years, it may very well reach figures posted in 2005 and 2006, said Ed Pattermann, broker and owner of Windermere Real Estate in Prescott.
Pattermann, however, hopes it slows down.
"I hope we stay into single digits so that it's more moderate growth," Pattermann said. "If we grow too quickly, we'll price ourselves out of the market."
Pulling from PAAR's MLS, Pattermann said that 84 percent of the sales last year were properties going for $300,000 or less and that 94 percent were $400,000 or less.
"A lot of the people coming here are looking for a good value," Pattermann said. "That's our sweet spot, having products in the high $300,000s."
It's difficult to say exactly what the local figures will end up being for this year, but so far, statistics are indicating continued growth.
"Overall, I see 2016 being very similar to 2015," Aslanian said.
Follow Max Efrein on Twitter @mefrein. Reach him at 928-445-3333 ext. 1105, or 928-642-7864.