Are you planning on buying a property in Prescott, AZ? Whether you intend to buy a primary residence or an investment property, you need to know the current state of the Prescott real estate market. Read on to find out what you can expect as a potential buyer or investor in 2023.
1. Prescott Housing Market Forecast 2023
In Prescott, AZ, the real estate market has changed over the past few years. Three years ago, the Prescott real estate market was highly competitive, with greater demand, rising prices, and low inventory. The market has since shifted to one that favors buyers.
Home Values Increasing
As long as there is demand for Prescott real estate, homes will likely appreciate. However, the amount of appreciation has decreased over the past few years. Specifically, in 2018, Prescott homes appreciated at an impressive rate of 6% and rose by 2% four years later. Home values will likely experience an even lower appreciation rate if this trajectory continues.
Rising Interest Rates
In mid-2022, the federal interest rates were raised, which affected nearly every real estate market across the country. Prescott's current interest rate for a 30-year mortgage is almost 7%.
Investing Indicators Will Favor Landlords
With home values increasing gradually, Prescott real estate might not be a good investment for the short term. However, in the long term, you will likely see significant growth in home appreciation rates. Prescott homes will likely appreciate by as much as 19% over the next 10 years.
Positive Net Population Migration
For many years, more people have been relocating to Prescott, AZ. From 1980 to 2023, the population went from just under 20,000 people to nearly 50,000. Many of the people relocating to Prescott came from California, seeking a lower cost of living. In addition, the thriving job market, gorgeous landscape, and mild climate entice many people to move to Prescott. The housing market is looking optimistic, with massive numbers of people choosing to relocate to Prescott.
2. Yavapai County Housing Market Trends 2023
Prescott is located in Yavapai County, which is nestled in the heart of Arizona. Much of the county comprises the 1.2 million acres of Prescott National Forest and 19 other officially designated wilderness areas. In addition, Yavapai is located within easy driving distance of major cities like Phoenix and Flagstaff. With a fantastic balance of natural beauty and many things to do, it is no surprise that many are relocating to Yavapai County, with nearly 250,000 inhabitants in 2023.
How Covid-19 Affected The Prescott Real Estate Market
During the pandemic, the country saw a shift as many people transitioned from working in-office to remotely. With this freedom, many sought rural areas with luxury homes on large plots of land. In particular, many came from large metropolitan California cities to Prescott, where they reaped many benefits. For one, a luxury property in Prescott is worth about 70% of the cost of a California home. In addition, there is a decreased tax rate and an overall lower cost of living. This trend has continued as many people continue to relocate to Prescott from California, as well as many parts of the nation.
3. Prescott Foreclosure Statistics 2023
A few years ago, mortgage interest rates were extremely low, which led to demand and home prices rising concurrently. Now, foreclosures are increasing across much of the nation. In Arizona, foreclosures increased by 165% from 2021 to 2022. When the economy starts shifting with fluctuating prices and rising inflation, it can lead to some properties going into foreclosure.
4. Prescott Median Home Prices 2023
Prices for Prescott real estate have increased, especially over the past year. By the first quarter of 2023, the median price for all types of homes was $695,000, a 15% increase year-to-date. Many luxury homes are priced well above the median, some even exceeding one million dollars.
5. Prescott Real Estate Market: Should You Invest?
In Prescott, home prices are generally decreasing, with the potential for strong appreciation growth in the long-term future. Investing in Prescott real estate is an excellent option, yielding significant revenue over the next few decades. Continue reading for the five Prescott neighborhoods that will generate a wide profit margin for homebuyers and investors.
For buyers who wish to live in a walkable neighborhood with a full array of quaint shops and fabulous eateries, downtown Prescott would be an excellent option. Many historic homes date back to the 1800s, ranging from $300,000 to just over $1 million.
American Ranch is a beautiful ranch community on acres of rolling hills with majestic mountains nearby. Many of the luxury homes have expansive lots that are perfect for horses. There is an Equestrian Center and a highly amenitized clubhouse. Homes in the American Ranch community range from $1 million to $3 million.
Hassayampa Village Community
Hassayampa Village is a gated community that boasts many types of homes, from single-family to condominiums to townhouses. There is a private country club and golf course where residents can enjoy spectacular views and a thrilling game. Condos are priced at around $500,000, and single-family homes are often priced well above a million.
If you are looking for a community with custom homes and no HOA fees, consider the Forest Trails neighborhood. Forest Trails is close to the popular Thumb Butte area, with plenty of rock climbing and hiking opportunities. It is also within easy driving distance of downtown Prescott for lavish shopping and dining experiences. Homes in Forest Trails often go for anywhere between $600,000 to $1 million.
Country Club Park
Located south of the Thumb Butte area, Country Club Park offers plenty of single-family homes with mid-century architectural influences. These luxury homes often range from $500,000 to $1 million.
Ready To Invest In Prescott Real Estate?
Have more questions about the Prescott real estate market, or are you interested in buying a new home in the area? If so, schedule a consultation with experienced REALTOR® Michael Osborn of M.O.R.E. Homes. He can guide you on everything from real estate market insights to innovative marketing strategies.