Unprecedented Home Prices Require a Careful Strategy

If you’ve tried looking for a home or selling your current one recently, then you know the housing market continues to be as hot as ever, with some of the highest prices we’ve seen. According to the Multiple Listing Service provided by the Prescott Area Association of REALTORS (PAAR), during the first quarter of 2022, the average sales price of homes in the area rose nearly 23% year-over-year, to $546,866.

Homes in Prescott Valley experienced the largest increase in average price, reporting a 26.8% increase over the first quarter of 2021. The average sales price increased in Dewey-Humboldt by almost 25% and in Prescott by 23%, while Chino Valley reported an 18.4% increase in average cost.

Is This the New Normal?

Tight inventory and rising prices are nothing new in today’s marketplace, and while there has been some slight tapering off, it looks like the lightning pace of the market is not slowing down anytime soon. Historically low inventory continues to push up demand and, with it, prices. Lack of building materials has caused new construction to lag, which only adds to the sparse inventory. However, the price increases, along with rising interest rates, have curbed some of the buying frenzy and helped moderate the inventory levels, even if only slightly.

The increased demand and rising prices can be very attractive to those thinking about selling. But there are still some important factors for prospective sellers to consider before listing their home.

How Sellers Can Prepare in this Market

Many people choose the spring to sell their homes because demand tends to be higher than usual. Potential buyers have often received their tax refund money and are eager to use it to supplement their down payment. The warmer weather also entices buyers to get out on the weekend and look for their next home. And, the end of the school year traditionally signals an increase in buying activity, as families seek to move between school years.

Prospective sellers need to consider that selling their home often means needing to buy another, placing them among the frenzy of buyers themselves. While selling will certainly provide an influx of money that may help make a stronger offer on their next home, sellers need to think about their timeline and the balance of the expense of purchasing versus selling to make sure it makes financial sense for them. A realtor can provide objective, professional guidance to sellers about their options and help create a realistic timeline and strategy for buying and selling at the same time.

Sellers will also need to consider their priorities when it comes to accepting offers. The highest offer is not always the best offer, so defining their goals for selling their home is key. This can be communicated to their realtor so their realtor can help keep the process in alignment with those goals.

Selling a home can also be an emotional process. Memories and personal connections are tied to the property, and it can be hard to remain objective when selling something that means so much to them and their family. A realtor with expert knowledge of this local market can help sellers maintain their focus and keep the transaction on track. QCBN

By George Beitzel

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

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 www.paar.org.