Confused by Home Price Headlines? What Prescott Buyers and Sellers Should Know

If you have read the news lately, you have probably seen two very different stories. One headline says home prices are falling. The next says they are still climbing. If you own a home in Prescott, or you are thinking about buying one, it is fair to ask which one is right.

The short answer is that it depends on where you live. Here is what is really going on.

What Is Happening With Asking Prices

Part of the confusion comes from how the media talks about asking prices. Many stories point out that asking prices are falling, but they skip the context, including the fact that seasonality plays a big part.

Right now, there are more homes on the market than at any time since November 2019. Mortgage rates have also moved up since the spring, so homes are taking a little longer to sell. One way to help a home sell quickly in that kind of market is to price it a bit lower.

According to HousingWire Data, the median asking price dropped from $449k in early August to $435k just two months later.

That is a dip of about 3%, and a good part of it is normal for this time of year.

• Asking prices cool off every fall once the busy summer season wraps up.
• There are fewer buyers in the fall, so sellers tend to price a little more competitively.
• Today's mortgage rates play a role too, since sellers are pricing to match what buyers can afford right now.

That is a good thing. Smart pricing helps homes sell. Just keep in mind that this is a national number. It does not show what homes near you are actually selling for.

Why Where You Live Changes Everything

Realtor.com explains it this way:

"While national headlines might suggest a buyer's market is taking hold, the reality on the ground depends heavily on where and what you're trying to buy. Local trends can diverge sharply from national averages, especially when you factor in price range, property type, and post-pandemic market dynamics."

The latest S&P Cotality Case-Shiller Index shows just how true that is. Over the past year, sales prices in Chicago rose almost 7%, while Seattle dipped about 1.6%. That is a gap of nearly 9 percentage points between two major cities.

That gap changes your game plan.

• Selling in a market where prices are up almost 6%, like New York? You may not need to cut your price.
• Buying in a market like Denver or Las Vegas? You may have more room to negotiate.

Prescott and the Quad Cities have their own pace, and it can look very different from the national picture. The only way to know is to look at local sales.

Why You Do Not Need to Worry About a Crash

If you are seeing slight declines in some markets and wondering whether a bigger crash is coming, here is what to remember. Even in the major metros where prices are down, the declines are 2% or less. That is a long way from 2008. And there are more cities in the green than in the red.

Over time, home values have a strong track record. The Federal Housing Finance Agency (FHFA) says national prices have grown year over year every quarter since 2012. Go back further, and a $100k home bought in 1991 would be worth about $436k today, even with the 2008 crash factored in.

This short-term dip probably will not stick around. The small declines we are seeing now are mostly in markets that overheated during the pandemic. As a whole, the market is heading back to normal, and normal means prices rise over time.

Bottom Line

National headlines cannot tell you what your home is worth or how much room you have to negotiate. Local data can. If you are thinking about buying or selling in Prescott, reach out. I can walk you through how prices are moving in your neighborhood so you can set your price or make your offer with confidence.

Curious what your home is worth right now? Get your home value here. You can also keep up with the latest on our market news page.

Source: Confused by Home Price Headlines? Here's Why