August 2026 Prescott Market Update – Pending Sales Dip, Inventory Grows, and Sellers Face a Widening Pricing Gap

Good afternoon, everybody. Geoff Hyland here with The Hyland Group at eXp Realty in Prescott, delivering your August 2026 market update. It's that time of year — kids are heading back to school, summer is winding down, and I hope you had a wonderful season. Let's dive into the numbers, because July brought some shifts we haven't seen in a while.

Pending Sales Take an Unseasonable Dip

If you've been following along, you'll remember that May delivered 277 homes going under contract, and June came in at 282. July, however, dropped to 223 pending sales — the second-lowest pending number we've seen in the last 12 months. The only months that came in lower were November and December, which is typical for the slower winter stretch.

To see 223 pendings in July is unseasonably low. Reflecting on 20 years in this market, I've always felt like June has a tendency to be a bit of an off month here and there — but this year, June was actually one of the stronger Junes I can remember. That makes July's drop a little harder to explain.

Is this a one-month anomaly, or a sign of things to come? Honestly, I don't know yet. One month of data doesn't make a trend, and I'd like to believe July was just a little off. We'll be watching closely.

Closings Held Strong — For Now

The good news is that closings in July were solid. 288 properties closed escrow, which is a healthy number. But keep in mind that those closings were the result of May and June pending activity. With July's pending count coming in so much lower, we're likely to see a softer closing number next month.

Interest Rates Climb to a One-Year High

A big part of what's contributing to the pending slowdown is what's happening with interest rates. As of August 1st, rates sit at 6.82% — a one-year high.

What's pushing rates up? A combination of factors: ongoing tensions overseas, particularly the situation in Iran, along with gas prices, inflation, and general economic uncertainty. Most of us would like to see those situations resolve one way or another so the pressure eases.

I do want to put the rate conversation in perspective, though. I was reading an article this week comparing the buying experience in Seattle in 2021 versus buying a home in 2026. The author actually described the 2026 experience as far more pleasurable. Why? Because it wasn't the frantic, agent-breathing-down-your-neck, "you have three minutes to decide because 15 other buyers are lined up behind you" experience so many people were forced into during the peak frenzy years. Today's buyers get to walk through homes, think, negotiate, and make thoughtful decisions.

The advantages for buyers right now are real: plenty of inventory to consider, sellers who are realistic and willing to listen to the market, and sellers who are receptive to repair requests during inspection.

The experts believe rates will come down eventually. When exactly? Nobody knows. But if you're a buyer sitting on the sidelines, take a hard look at what you're currently spending on rent or your monthly housing costs. And for perspective on the rate anxiety: borrowing $400,000 at 6% versus 6.5% is a difference of less than $200 a month. The rates aren't where anyone wants them, but that's often a smaller gap than people assume. Buy the house now, refinance when rates settle at a more comfortable level.

Inventory Continues to Grow

We're now sitting at roughly a 4.2 to 4.3 month supply of homes across the market. Given the softer pending numbers in July, I fully expect us to cross the five-month threshold next month.

Active inventory now sits at 1,232 properties, with an average of 103 days on market for what's currently listed. Days on market for homes that actually sold held roughly steady at around 60 days — whether we're looking at Prescott, Prescott Valley, Chino Valley, or MLS-wide.

Values Softened, and the Pricing Gap Widened

Last month we celebrated a value rebound. This month, that momentum cooled. Prescott values slid about 4%, and MLS-wide values were down roughly 3%. Looking at Prescott over the last 12 months, the chart is full of highs and lows — averaging around $346 per square foot for the typical home.

But here's the number sellers really need to pay attention to: last month, active inventory was priced about 4% above the average sold price per square foot. This month, that gap has widened to 10.3%.

That's a significant jump, and it tells us that new listings are coming to market with more aggressive pricing than the current market is willing to support. Sellers who chase the market with optimistic pricing tend to sit — and sit — while properly priced homes continue to move.

A Reality Check on Showings

I did some research this month on MLS-wide showing activity, and the average listing is generating about 2.5 showings per month. If that's roughly where your listing is, understand that this is the market average — but you don't want to be average.

My personal goal for every one of my listings is four to six showings per month. That's the number that tells me buyers are responding the right way, that our marketing is landing, and that we're getting the exposure needed to actually sell the home. If your listing is stuck at two showings a month, it's worth taking a hard look at whether there's an MLS error, a marketing gap, or a pricing issue that's holding you back.

The Bottom Line

The market isn't broken — but it is shifting. Pending sales softened in July, inventory is expanding, values pulled back slightly, and the gap between list prices and sold prices has widened significantly. Buyers have real advantages right now: selection, negotiating room, receptive sellers, and a less stressful buying experience than any we've seen in years. Sellers, on the other hand, need to be sharper than ever on pricing, presentation, and marketing exposure. This is a market that rewards realism and punishes optimism.

We'll monitor these numbers closely and see what August brings. My hope is that July was just an off month — but if the trend continues, both buyers and sellers will need to adjust their strategies accordingly.

Questions About Your Specific Situation?

Every buyer and seller has a unique story, and market statistics only tell part of it. Whether you're thinking about selling, relocating to Prescott, buying your first home, or simply trying to make sense of what today's market means for your plans, The Hyland Group is here to help.

Ready to make your move with confidence? Contact The HYLAND GROUP today. As the #1 team in Greater Prescott for 14 consecutive years with one sale every 24 hours, we'll help you navigate today's market with the expertise that comes from $1.7B+ in sales and serving more than 4,300 families.

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