Prescott Valley, AZ

It's getting old to say, BUT, the distressed real estate market in the Prescott area was busy on the listing AND closing sides this week. Identical to last week, eighteen new foreclosed or short sale homes came on the market, about one in every five homes being listed in the Prescott Arizona Area MLS system, and just over one half of the closings, or 12/25, were distressed sales in Prescott, Prescott Valley, Chino Valley, Dewey-Humboldt and the outlying areas of Yavapai County.

The difference between what newly listed traditional homes and Prescott foreclosed/REO and short sale properties per square foot remains large at a 39% discount compared to 40% discount last week.

The market down in the valley is continuing to show progress and that's good news for us as many of them buy second homes and/or move to the Prescott area.

See: Metro Phoenix housing market finally emerging from ashes

The percentage of foreclosed/REO/short sale new listings on market remained the same at 19% this week. Last week 45% of the pending sales were REO or short sales, and this week they made up ff% of the deals going into escrow. The amount of REO/short sales that closed last week went from 44% last week to 52% this week. REO/short sales also sold about 47% faster than traditional resales.

See the full report on our main web site.

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Fico Scores/Reports

I've been posting for a couple of weeks about cash buyers are starting to make up the majority of my clients and how they feel it is time to buy. They have been buying a mixture of foreclosures, estate sales, and traditonal resales (all at bargain prices) in downtown Prescott, Talking Rock cottages, and income properties in Prescott Valley.

Now the numbers are starting to come out of the valley and according to the Arizona Republic this morning, "for the first time in years, there's good news coming out of metropolitan Phoenix's housing market."

The article, by Catherine Reagor their real estate guru, goes on to say that March saw several firsts:

1) Home sales rose to 2005 levels;

2) Foreclosures fell for the first time in a year; and

3) Several Phoenix neighborhoods saw prices stabilize.

She goes on to quote from a Phoenix real estate pro:

"The affordable end of the Valley's housing market could finally be at the bottom looking up," said Mike Orr, a real-estate agent and analyst who publishes the Cromford Report. "Homes priced for $150,000 or lower are selling fast and even getting multiple offers. My money is on home prices in many of those neighborhoods being slightly higher by June."

If sales continue to climb in other metro Phoenix communities this month and in May, there's a good chance home prices in the Valley's most affordable communities could tick up in June.

"April will be the turning point for the housing market," Orr said. "People are beginning to perceive we are at the bottom, and there's no reason to wait to buy anymore."

See the whole article here: Promising signs from Valley housing data

People who know me can tell you that I am a realist over an optimist. Right now I think reality is that if you are waiting on the sidelines and keeping stats, circle today and then if you haven't gotten a deal in escrow in 90 days, check this space to see what the average price has gone to in the Prescott area. I bet it is up.

For the latest quarterly report of Prescott Arizona area foreclosures and short sales,
see this post: Prescott Arizona area foreclosure market report for Q1 2009

I have many clients who call me looking for deals on short sales and foreclosed homes in the Prescott Arizona area market including Precott Valley, Chino Valley and Dewey-Humboldt. Many think that short sales are better deals than foreclosures, but his is rarely the case.

What the difference?

The short sale process has many moving parts that must be aligned in order for the sale to close. First of all, the lenders have to agree to a short sale, but sometimes banks won't agree to a short sale without an offer. This means that the home has been listing for a price that the bank hasn't agreed to, and once the offer comes in, the bank will assign a loss mitigator to review the process. This could take several months and most likely will involve a counter offer by the bank close to the loan amount...regardless of whether or not the loan has any bearing on market value. Then the games begin.

When you buy a foreclosure in the Prescott area, the process is much more straightforward and the prices are set by the bank and not a by the homeowner and REALTOR, who have nothing to lose by listing it below market value. In fact, it stimulates demand and clients for the listing agent and the homeowner thinks there is progress because people are looking at their home and making offers.

That's not to say that all short sales are not good buys. The key to success is being prepared and having a full understanding of the process.

See these posts from the blogosphere for more info:

Schaefer Landing Seller Takes 'Short Sale' Pitch to Craigslist

Short Sales are No Bargain to Buyers

Is a Short Sale A Bargain

Last week I posted about the Southern California real estate market and how it was rebounding, see: Great news for Arizona! So Cal prices didn't drop in Feb, and now we have good news from our southern neighbors in the Phoenix area. Our home sellers in Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt rely on the real estate market to the south of us as well. Many buyers from Scottsdale, Peoria, Glendale, and other valley cities acquire second homes and investment properties in our area. Good news down south, means good news for the Prescott area as well.

Mike Cromford, in his Arizona Real Estate Market Report, on March 22nd said:

There is no doubt that we are experiencing a boom in buying across all the areas where pricing is very low. This increase is having little effect on properties above $150,000 but below that mark, and especially below $100,000, I'm tempted to call it a feeding frenzy. The effect is also largely confined to single family detached homes, with condos experiencing relatively weak buying interest.

Listing success rate across all areas and types is now over 50% - we haven't seen that since June 2006.

Pending listings approach 11,000, a level last seen in August 2005.

Active listings are at 50,561, their lowest point since April 2007. However that total includes 1,928 active listings with contingent offers, up from 883 at the start of the year. So the increased demand is eating away at the over-supply quite nicely.

The statistics tell one aspect of the story, but personal experience reinforces it. I have made offers on several inexpensive properties in the last few weeks, for myself and on behalf of clients. In every single case there were multiple offers. In one short sale case there were as many as fourteen offers on the table at the bank before I even made an offer. In fact I have so far not managed to be the highest bidder for any of the properties. Luckily the highest bidder dropped out of one deal for lack of financing, and I was in second position, so I did come away with one signed contract. Not one of the properties has so far sold for less than the asking price, and one went for at least 50% higher.

It feels like a seller's market in these low-priced locations, because of the spirited competition from other buyers. But luckily for the buyers, the sellers (the banks) don't seem to have quite noticed yet, and they are still keeping prices low. Could it be the psychological pressure of the additional pending foreclosures looming over them? They may be wondering how long this buying frenzy can last. It's a good question. But right now there is not the slightest sign of it faltering. See the original post.

If you are waiting for Godot and the "right time to buy," then you should consider NOW.

One need not travel to Vegas to see a Cirque du Soleil production. In Prescott Valley Arizona in northern Arizona, from November 20nd-23rd there will be a Cirque du Soleil production called Saltimbanco. The event takes place at a facility called Tim's Toyota Center at 3201 E Main Street in Prescott. The production is a celebration of live and the city. For more details, ticket prices, buying tickets and details call 928-7772-1819.