Prescott's Real Estate Market Forecast: What to Expect in the Coming Years

Prescott, Arizona, renowned for its scenic beauty and historic charm, has become an increasingly attractive destination for homebuyers and investors. As we look ahead to 2025, understanding the projected trends in pricing, inventory, and buyer demand is crucial for making informed decisions in this evolving market.

Current Market Overview

As of December 2024, Prescott's real estate market presents a mixed landscape. The median listing home price stands at $754,400, with a median sold price of $652,500. Homes are selling at an average of 2.97% below the asking price, indicating a buyer's market. Properties typically remain on the market for about 89 days, suggesting a moderate pace of sales.

Projected Trends for 2025

Pricing Trends

Nationally, the median home price is expected to reach $410,700 in 2025, reflecting a 2% increase from the previous year. While this projection pertains to the broader market, Prescott's unique appeal may result in a slightly higher appreciation rate. However, the rate of price growth is anticipated to slow compared to the rapid increases observed during the pandemic years.

Inventory Levels

Inventory levels are projected to improve, with an anticipated increase in housing starts to approximately 1.45 million units in the next couple of years, nearing the historical average of 1.5 million units. This uptick is expected to provide more options for buyers, potentially stabilizing prices as supply catches up with demand.

Buyer Demand

With mortgage rates stabilizing near 6% in 2025, more buyers are expected to re-enter the market, boosting activity. This stabilization is anticipated to lead to increased construction and a more balanced market, offering relief to prospective buyers.

Local Factors Influencing Prescott's Market

Prescott's unique blend of small-town charm and access to modern amenities continues to draw a diverse range of residents, including retirees and remote workers. This demographic shift is expected to sustain housing demand, potentially leading to stable or even rising home prices. The city's allure as a retirement destination and its appeal to those seeking a higher quality of life away from larger metropolitan areas contribute to its growing population.

In summary, Prescott's real estate market in 2025 is poised for steady growth and stability. With moderated home price increases, an uptick in housing supply, and favorable mortgage rates, the market presents a promising landscape for both buyers and investors. As Prescott continues to attract new residents with its unique charm and quality of life, the real estate market is set to thrive in the coming years.

If you're considering buying a home or investing in Prescott's promising real estate market, now is the time to act! With favorable market conditions predicted for 2025, you can take advantage of increasing housing supply, stable prices, and lower mortgage rates. Contact Peter Fife at COLDWELL BANKER NORTHLAND to start your journey. You can reach Peter by phone at (928) 636-7000, via email at [email protected], or visit the office at 914 E Gurley St., #100, Prescott, AZ 86301. For more details, visit the website at https://listingprescott.com/.