500k to 600k Activity......

As of this writing, there is a deluge of information about markets, coronavirus impact, real estate market observations, short-term outlook, interest rates, baby boomers, millennials and on and on.......One commentator says housing is strong, inventory is down, demand is up, interest rates are down, therefore it is a great time to buy.  Another on the same page says folks are choosing to rent still, the boomers homes are not homes millennials will buy, re-fi's are slowing things down....etc.   Most have learned to sift through the information and know you can get opposing opinions from literally the same information source.  One bit of news is indisputable though, interest rates are as low as ever...8 years ago everyone was bracing for increasing rates,  but for now, borrowing continues to be a bargain.  In a very general sense, it seems supply is low.  However, housing starts are up in the private sector. Here is the Fed Reserve Bank of St. Louis 5 year starts chart:
Maybe in the near future demand and supply will get closer to one another with the increase in starts and permits in the pipeline. Here in Prescott, I was curious about the 500k to 600k price range activity in the Prescott proper area excluding the surrounding towns and cities. There are about 103 site built homes listed in the 500k to 600k range either for sale or in escrow. As of the writing, 60 are available, and 43 are in escrow. If you are financing your next purchase, it may be a good time to take the dive. A 1.5% difference in a 30 year mortgage interest rate on $500,000 (from 3.5% to 5%) can be a $500 +/- difference in a monthly payment. What can you do with $500 monthly? Lots!

Prescott Real Estate Sales at the Moment........300k to 380k

Seems like the "affordable" pricing tier of homes is going quickly right now.  I put affordable in quotes because I simply queried 300k to 380k in our Prescott Area MLS and found myself thinking, "this is still almost a third of a million dollars at the low end".  A $300,000 mortgage at 4% over 20 years is about $1800 per month.  For the first few years about half interest, half principal.  Anyway, these seems to move quickly.  I wanted to see, of the closings 300k to 380k in pricing since Jan. 1 2020 in Prescott, what the "days on market" numbers were.  No earth shattering insights, but there was a mild but interesting inverse correlation between "days on market" and age of construction.  Also something to keep in mind is that in all of Prescott on the MLS, there are only 29 active listings of site built homes in the 300k to 380k price range as of this writing.  Perhaps if you have a renovation bug, you can benefit by targeting some of the older homes.  They can be in the older and forested areas with less inventory and if on the market longer, perhaps a "bargain" can be had.  If at all up to date or well done, they do go quickly. "CDOM" is cumulative days on market.

Water in Yavapai County, Arizona........?

About twice a year for the last few years I get a random call from someone asking, actually, telling me about water in Yavapai County or in Arizona entirely for that matter.   Mostly the callers are from greener parts of the the country where I assume there is plenty of water. But that is my guess, just like there is a lot of guessing about our water situation by folks considering moving.  They have totally legitimate questions about water supply and are smart to question.  Maybe they are pondering a move, especially during the long winter months.  I am writing this at a mile-high elevation in Yavapai county and the current temperature is 56 F and sunny. A quick googling reveals it is 13 F in Chicago with 70% humidity..........Buffalo, NY is much more temperate at 32 F but is snowing with 86% humidity and 83% chance of continued snow.....Phx is scorching with 66 F.  So who can blame one for randomly calling a stranger/agent and asking about water and weather in Arizona during February.  Back to the point, water is an extremely complex subject and many times the caller has just read an article, book, or seen a movie and they are charging hard on this platform:  "There is no water there (here), I want to move there, but water will run out, and Ill be stuck with a home with no water! The wells are drying up!"  Sometimes the caller will signal that they are speaking from a well informed position.  One fellow called from upstate NY and was a civil engineer and let me know that right away.  He is almost certainly smarter than myself about hypothesizing on what could happen in the future and how water is moved around etc....but I did tell him that I just went to a water seminar and the water engineers at the Arizona Department of Water Resources seemed pretty dang smart.  I could not articulate the exact seminar details to the caller, but the hydrologists were not planning for imminent ghost town status of Northern, Southern and Central Arizona it seemed.  We did get to chatting a bit and he was interested in sort of out of the way properties, a couple acres, which generally means in the county areas north of town where wells service many properties.  I did let him know many of the well drillers in Yavapai County have incredible specific knowledge through decades of work and they would be a great source of specific area answers, but the caller would not have it, I think he just wanted to vent that his retirement dream is colliding up against a possible water shortage, I was fine with that and let him vent.  He did allow me to convey a couple points which was great because I only know a couple points about the massively complex issue of water in AZ.   The Big Chino Sub Basin is a natural underground system north of Prescott that is estimated to contain 15,000,000 million acre feet of water.  One acre foot of water is about 326,000 gallons or basically a football field covered one foot deep.  The net mathematical result is some number I cannot even read on my google search bar. It is a lot.....The other bit of info I had is that according to the Department of Water Resources  water demand is less now than in the 1950's due to refined engineering and efficient water systems.  Amazing.  In fact we are, as a state, a couple million acre feet behind the overall demand in the 70's.  Click this link for an Arizona Republic article with a downloadable demand chart showing 1955-2017.
I am not saying everything is infinitely supplied and there is nothing to be concerned about, but, there are so many aspects to water here, if you are the research type, you could spend 6 mos. trying to learn the basic details.  The Department of Water Services has many programs, 100 yr assured water supply requirements with growth projections built in, active management areas for the groundwater depletion areas, desalination committees and studies, flood plain management, irrigation regulations....and on and on.  They are a good resource and frankly this is where one should get water info, I would not rely on an agent for this information, it is way too specific and requires an expert for reliable information.  Here are some starting to points to get yourself informed about water in Arizona.
Prescott Valley Water Resources Page.
City of Prescott Water Management. 
Arizona Department of Water Resources.
Prescott Valley info on the Big Chino Water Ranch
United States Geological Survey Big Chino Aquifer Storage and Change Report. 

Post #1 :)

Hopefully this evolves into a useful tool for those relocating to Prescott, those selling, and those researching the housing market in general.  I tend to be stats and research driven but hope to make this utilitarian. If you are at all thinking about selling, contact me, I am glad to research your property.  My sense at the moment, (2/5/20) is that there is healthy buying activity. There is some optimism in general, payrolls increased this month, rates are low, mortgage applications are up, the major indexes are healthy as of 2/05/20. Nothing lasts forever, but if your are thinking about selling, contact me now.  I want to combine long view perspective with current data and practical information for those researching a move to or from Prescott.  

On another note, just got a notification that the icon, Kirk Douglas passed on at the age of 103.  What a long and prosperous life and an example of a self-starter, creating his own film company. RIP Kirk Douglas