We are starting to feel a little bit of a shift out there. Interest rates remain basically where they've been for the last 60 to 90 days, hovering right in that 6.9%/6.95% range. The biggest thing that we're seeing right now is the continued rise in terms of inventory.
As of June 1st, we now have 1231 site-built, single family homes for sale on the market. That marks the highest level of inventory that we've seen in over a decade here in the Prescott marketplace.
The average days on market for homes last month, MLS-wide, was about 67 days. There were some slight variations between Prescott, Prescott Valley and Chino Valley.
Over 610 properties are on the market, out of the 1231 in the Prescott area, 268 in Prescott Valley, and 100 in the Chino Valley marketplace.
We are seeing quite a bit of homes going on the market and selling at a fairly rapid pace, but we are seeing another subsector of the market where homes are languishing on the market. Days on market for the active inventory is now sitting at 97 days.
We've talked about this a lot, but if you go back and and look at where the market was in, say, January or February and you study the active inventory, those homes were priced approaching 16% over market average. As of today, those homes are now reduced down to 13.5% over market average.
If you jump on Realtor.com, Zillow, Redfin, you're continually seeing price reduced, price reduced, price reduced, price reduced.
Buyers have lots of options out there. For the first time in ten years, they've got a lot of inventory to sift through.
So if you're not really setting yourself apart from the market, it's more than likely you could experience some extended marketing times.
As far as values are concerned, and if you're a buyer especially, values themselves are really not declining.
Last month MLS-wide, there was a negligible, third of a percent decline. So realistically, year-over-year, there's not a whole lot of change in the overall market value. So the market is not dropping. What you're seeing is prices coming down from those homes that are on the market that have overshot the perceived value of the home.
So if you're a seller and you're on the market right now and you're getting showings or you're not getting showings and you're contemplating doing an adjustment to the price, that's probably one of the things that you need to be considering.
At the end of the day, the only way that you can really assess if your home is going to sell, and if it's going to
be received well by buyers, is by subjecting it to the market and listening to the feedback.
If you're not getting the showings on your property, you're not attracting the offers that you were hoping for, it's important to note that while we talk about the market not declining, there are certain subsectors of the market that are weaker than others.
I'll give you an example. There were 245 homes that went under contract in the month of May 223 closings.
When you study those 223 closings that occurred last month, 19 of them, 10% that sold at or above $450 a square foot. The overall MLS market average from last month was running at $312 a square foot last month.
When you look at 10% of the market that sold at or above $450 a square foot, it's an indication that, Number One, it's going to drag some of those averages up slightly. Number Two, it tells us that if it's new, if it's well-maintained, if it's something special, that luxury market is still, very active. So we have to be cognizant of that as well.
The true representation of whether or not the home is priced correctly is whether or not you're attracting offers.
If you're a buyer and you're still kind of on the sidelines and you're asking yourself is now the time, you've got more options than you've had in a decade.
There are sellers out there that are very receptive to things that they haven't been in recent years. We've put two offers together that were contingent on homes being sold. And of course, that takes the right circumstances, properly bidding out the contingency property. Is it under contract? If it's not under contract, who's the listing agent? What's the listing price? So lots of questions there.
By and large, sellers are more receptive to slightly more creative offers than they have been in the past, which creates a great opportunity for you as a buyer. That's not too surprising with a ten year high in inventory. We're sitting at 5.52 months supply. That's the third highest month in a decade as well.
Six months is widely accepted as a balanced market and I would say that what we're seeing is a continued shift towards that.
A total of 446 new homes came on to our MLS in the month of May alone.
If you're thinking that interest rates were going to help you out in the short term, I did some research on that.
Whether you're talking to NAR, whether you're talking to, multiple other stats or sources that I looked at, it seems like the consensus is that interest rates could falter a little bit, maybe a quarter to a half a point, some time by the end of the year. On a $500,000 mortgage, if the interest rate comes down a half a percent, you're saving roughly $144 a month.
So if you're wondering if you should wait or if you should look at the market now, I would say look at the market now. And if those rates come down, then refinance as appropriate.
And like I said, sellers are way more open now than they ever have been to looking at things like buyer concessions. Maybe buy that rate down to match your budget right now.
So that is the market update for the month of June. We'll continue to keep you apprized of any changes in the marketplace and we'll talk to you next month.
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