Prescott area home sellers see significant profits
Ranks in top 20 most profitable U.S. markets
The Prescott area is one of the most profitable areas for home sellers in the nation, according to ATTOM Data Solutions.
The property data company recently released its 2Q 2017 U.S. Home Sales Report, examining 118 metropolitan statistical areas with at least 1,000 home sales in the second quarter of 2017.
2017 2nd quarter market report fun facts
• 1,142 Total Homes Sold
• 12.7 homes sold per day (9/day 1st Qtr)
• Homes sold for 98 percent of their list price
• Only 4 percent of total sales were Foreclosure & Short Sales (45 sales)
• Most Expensive Sale = $1,030,000 in Prescott (Talking Rock)
• Least Expensive Sale = $26,500 in Hillside
• Largest home sold was 5,426 sq. feet
• Smallest home sold was 541 sq. feet
• Home types: 893 of the 1,142 sales were stick built homes; 171 were mobile/manufactures homes (double & single wides); 78 were townhomes, condos or patio homes; 537 were in home owners’ associations
Information sourced from the Prescott Area Association of Realtors (PAAR) and gathered by Cody Ann Yarnes with Realty Executives of Northern Arizona.
Though it is a stretch to consider it a metropolitan area, the Prescott area, which includes Prescott, Prescott Valley, Chino Valley, Paulden and Dewey-Humboldt, narrowly qualified for this report with 1,142 homes sold in the second quarter of 2017 (April, May and June).
No matter, it ranked quite high, taking the 19th spot on the list, with home sellers getting an average return on investment of 47 percent.
This outstripped areas like Reno, Nevada, Salt Lake City, Utah, and Lake Havasu City-Kingman, Arizona, which claimed the 32nd spot.
While he’s unsure exactly how the information was tabulated, Paul Aslanian, broker team member and director of Business Development for BloomTree Reality in Prescott, believes the report.
“It is a seller’s leaning market,” Aslanian said.
This is primarily because the number of homes available for purchase has been dwindling in recent years while the demand is quickly increasing, he said.
“What’s driving this whole thing is basically a nationwide housing shortage,” Aslanian said. “It’s really created by one main thing, and that main thing is that new construction cannot keep up with the number of new households that are being formed. What’s causing that is primarily the millennials coming of age.”
Camilla Strongin experienced the results of this tightening market when she unsuccessfully attempted to sell her Prescott vacation home in 2014 and then — after a couple year hiatus and some renovation of the property — easily sold it this month.
“It seemed like it was a very different market [in 2014] from what we experienced this time,” Strongin said.
During the first attempt in 2014, her home was priced at $257,000 and ended up expiring off the market after 140 days of trying to sell it. This time around, the home sold within the first week of being listed for its full asking price of $280,000.
In July 2014, there were 893 homes listed for sale in Prescott, according to Prescott Area Association of Realtors (PAAR) data. In July 2017, this figure was at 645 (a 28 percent difference).
“You can see that’s substantial,” Aslanian said.
Many are saying that certain areas of the country have more or less completely recovered in regard to the housing market. Prescott could be considered one of those areas.
One indicator is the median sold price in Prescott for stick-built homes.
In the second quarter of 2017, that price was at $375,000, according to PAAR data. In 2005 (the last real estate boom), it peaked at $360,000.
“The median in 2010 (the lowest year) was only $250,000, if you can believe it,” said local Realtor Cody Ann Yarnes.
As for any concerns that the Prescott area might price itself out of the overall market or reach some sort of bubble, Aslanian doesn’t foresee that occurring any time soon.
“When we had this past recession, we saw a lot of foreclosures and people were buying too many investment homes,” Aslanian said “The buyers that we see today are real buyers — they’re not buying for investment, they’re people that want to live in their home.”
Many of these buyers, however, are coming from wealthier areas of the country who sell their homes for a premium and then easily afford a cheaper home in places like Prescott and Prescott Valley.
What this is leading to is a shortage of affordable homes for locals and first-time home buyers.
“We’re just starting to see this, but those buyers are going to outside areas like Dewey, Chino Valley and maybe Paulden because they can’t find an affordable house in Prescott or even Prescott Valley proper on a living wage.”