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Real Estate Values Climb Steadily as Market Struggles for Balance

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“When the rates come down, and they do, there will come a time when you will be able to refinance,” she said.

Home prices continue to rise, inventory continues to fall short of a balanced market, and the interest rate on a standard 30-year mortgage is hovering around 7.8%. Prescott Area Association of Realtors President and KMF Real Estate Broker/Owner Faye Humphrey says the Quad Cities remains a seller’s market, but she says, “It’s always a great time to buy the right real estate.”

For those who remember interest rates of the 1980s in the high teens, 7.8% looks pretty good. But compared to just a few years ago, the rate has tripled. For Humphrey, who has owned her house for five years and refinanced it three times to reach the historic low interest rate of 2.25%, her philosophy is: “Marry the house; date the rate.”

“When the rates come down, and they do, there will come a time when you will be able to refinance,” she said.

Humphrey also acknowledges that houses in desirable areas like the Quad Cities are expensive. The average list price in September 2022 was $632,000. Today, it is $701,000, up about 11% year over year.

“That makes me want to choke,” she said. “We have fewer sales today than we did a year ago because money is tight, but value seems to keep going up. Buyers need to shop harder and smarter.”

With just 1,097 residential homes currently available in Yavapai County, down about 20 from this time last year, the real estate market has more than three months of inventory. Six months of inventory, says Humphrey, would be considered a balanced market.

“We are much closer to a balanced, normal market than we’ve been in a long time,” she said, “but we are still in a seller’s market; however, not the frenetic kind of seller’s market we were in one or two years ago.”

For sellers, that means pricing the home based on comparable sales and expecting the home to stay on the market longer. “Some buyers are going to be asking for concessions. Eighteen months ago, that was almost unheard of.”

Prescott still remains the most expensive city in the Quad Cities area for real estate.

“If you want to get the most bang for your buck, go to Prescott Valley or Chino Valley or to Dewey. Today [with many people working from home], the geography doesn’t make that much difference,” said Humphrey. “If somebody comes to town and wants to buy a house for $300,000 to $400,000, there is a high likelihood they’ll be buying a manufactured home as opposed to a stick home.”

No matter the market, Humphrey recommends hiring an experienced, licensed real estate agent, familiar with the cycles and strategies of buying and selling homes. More than 2,500 licensed realtors make up the Prescott Area Association of Realtors (PAAR), where she currently serves as president. QCBN

By Bonnie Stevens, QCBN

Courtesy Photo: Prescott Area Association of Realtors President-Elect Jeanelle Shearer, President Faye Humphrey and Chief Executive Officer Suzanne Westrum accept the Community Service Award from the Arizona REALTORS on Thursday, Oct. 19, in Litchfield Park. 

Preparing for the Quad Cities Real Estate Market

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The code of ethics all realtors abide by may make the difference between a seamless, painless experience and potential disaster.

Most business owners know that the real estate market is the backbone of every successful community; buyers move in, have families, open businesses, shop locally and so on. Property transactions have a ripple effect that is often a key predictor of economic growth.

So, how can property owners, both commercial and residential, prepare for the inevitable ups and downs of the market and ensure long-term equity growth and a solid investment? Here are some things to focus on:

History matters. The market is known for certain cycles and patterns, which can aid in making educated guesses about when to buy and when to sell. Look at the record of market data in your area. Your local realtor association tracks market data and can point you in the right direction.

Know your priorities. Do you have capital tied up in your business? Do you anticipate needing to move in the near future for a new job or an expanding family? All of these factors will affect your strategy.

Check your finances. You’re going to need cash for down payments, deposits, earnest money, repairs, the list goes on and on! Have you spoken with a lender to see what you’re qualified for? Have you crafted a budget and checked your credit score? This side of things can get complicated, so lean on your realtor to point you in the right direction for your individual needs.

Use a realtor. The code of ethics all realtors abide by may make the difference between a seamless, painless experience and potential disaster. Choose a realtor who has the education, experience and support to be exactly what you need.

Track your data. How have property values changed in your area, whether it’s your business or your personal residence? Do you have equity in your property? Are you relying on outside financing to supplement a transaction? Knowing how your money has behaved in the past will inform your timing and strategy.

Overall, preparing for the worst but hoping for the best is something we can all try to do. I’m hoping for a successful year for all of us here in the Quad Cities, but you can bet I’m also preparing for whatever comes next. QCBN

By M. Faye Humphrey

Faye Humphrey is the 2023 president of the Prescott Area Association of REALTORS.

About PAAR:
The Prescott Area Association of REALTORS (PAAR) is the trade association representing more than 2,000 REALTORS serving the greater Quad Cities area. Established in 1944, PAAR’s mission is to advocate for private property rights, and provide its members with resources to foster their business success. The term REALTOR is a registered trademark, which identifies real estate professionals who subscribe to a strict code of ethics as members of the National Association of REALTORS.

Will the New Year Deliver Another Hot Real Estate Market?

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So, what do prospective buyers need to do to get the home they want at a price they can afford?

For those in the business of real estate, 2021 was among the fastest-moving markets in history throughout the Quad Cities area. Some of the statistics are actually hard to believe. However, the unrivaled Multiple Listing Service provided by the Prescott Area Association of Realtors (PAAR) reveals that, last year, homes in this area spent just 11 days on the market. That is half the time it took homes to sell in 2020.

Not only is home inventory flying off the shelves, the median price buyers paid was $417,615, which is 22.7% higher than in 2020. Most of the area’s sales – about 40% – were homes priced between $400,000 and $700,000, with another 37% of home sales in the $200,000 to $400,000 price range. Home sellers in Dewey-Humboldt and Chino Valley experienced the largest increase, at 7% more sold than 2020.

Across the board, the largest increases occurred in land sales. Chino Valley was at the top of the list with a 24% year-over-year increase, or 118 sales of land. All other areas in the region reported an increase of 20% to 24% except Prescott Valley, which experienced a 4% increase.

What’s Going On?

Although the Quad Cities region has enjoyed a healthy real estate market for some time, what is the impetus for such dramatic numbers? For one thing, new homes are not being built at the same rate, curtailing available housing. Supply chain delays for new home construction, coupled with labor shortages during this time of COVID-19, have driven more  buyers to existing homes. Not only are there limited additions of new homes to the area, but prices are reflecting the higher cost of hard-to-find building materials.

Consequently, buyers have to act fast, and prices are higher than in recent years. So, what do prospective buyers need to do to get the home they want at a price they can afford?

How to Navigate Buying and Selling

Step one is to obtain the professional services of a realtor, because you will need an expert to navigate this unprecedented environment. These days, it is a must to work with a skilled realtor, who, every day, has the most up-to-date information on home inventory and understands the nuances of the local market and individual neighborhoods.

Step two: Because buyers will most likely have to make a purchase decision quickly, be ready! Get pre-qualified, and know your must-haves and what you’re willing to compromise on. Additionally, getting pre-qualified helps you know what you can afford so you can focus and not waste time when house hunting in this swirling market. Take advantage of your realtor’s knowledge to help you bid competitively.

Also, be prepared to tour homes virtually. With as fast as the market is moving, and many homes receiving multiple offers shortly after listing, you may need to take a virtual tour if you can’t see the home right away in person.

And, finally, make sure you understand the contracts and other documents you need to sign when purchasing a home or even just putting in an offer. Having a knowledgeable guide – like your realtor – by your side will give you peace of mind, whether you are a buyer or a seller.

As a seller, there is other important language in the contract to contemplate besides the dollar amount of the offer because the highest bid is not necessarily the best offer. Many factors should be considered such as the closing timeline, type of financing the buyer is using and contingencies, all of which will be stated in the legal documents.

Putting up a home for sale is an emotional experience for many sellers, which can make the entire process feel like being on a rollercoaster. After all, it’s hard not to take things personally when you are selling a piece of property that has meant so much to you and your family.

On the other side of the table, buyers may be on their own rollercoaster. This may be their first home or the place that finally brings them closer to their families. A realtor is objective and can help sellers and buyers keep their focus on the goal of completing a home sale on mutually acceptable terms and making the experience as painless as possible.

To find a realtor, visit paar.org/find-a-realtor. QCBN

By George Beitzel

George Beitzel is a local realtor and the 2022 President of the Prescott Area Association of Realtors (PAAR). For additional information or to contact PAAR, go to paar.org.