Prescott Sales Soften In Light of Decrease In Demand

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The Prescott housing market is showing a somewhat different pattern than the broader Quad-City area. Prices have softened, sales activity has slowed noticeably, but inventory has not increased enough to create a heavily buyer-dominated market. From July through September 2026, Prescott’s median closed price was $600,000, down from $622,000 during the same period in 2025, a decline of about 3.5%. Median price per square foot also declined from $322 to $315, or about 2.2%. At the same time, closed sales declined from 483 to 431, about 10.8%, while pending sales fell from 474 to 425, about 10.3%. Total, dollar volume declined about 9.5%, from approximately $331.7 million to $300.2 million. SEE CITY BY CITY MARKET SIGNS STATS HERE

What Is Keeping Prices From Falling More?

Some people have been expecting the collapse of housing values. But that just hasn't happened. Why? The answer appears to be limited inventory. New listings were almost unchanged at 589 in 2025 versus 588 this year. However, the average number of homes available for sale declined from 726 to 702. Months of supply also declined from 5.8 months to 5.4 months. So, while buyer demand has clearly weakened, sellers have not flooded the market with additional inventory. That limited supply is helping prevent a sharper decline in prices. Another encouraging sign for sellers is that median days on market improved slightly from 48 days to 47 days, while the sale-to-list-price ratio improved from 98.1% to 98.5%. That suggests properly priced homes are still selling reasonably well.

What Does This Mean for Buyers?

Buyers currently have more negotiating leverage than they did during the extremely competitive markets of recent years. Prices have softened, fewer homes are going under contract, and sellers may be more willing to consider concessions such as closing-cost assistance, repairs, or mortgage-rate buydowns. The biggest obstacle remains mortgage rates over 7%. Higher rates significantly affect monthly payments and purchasing power, so some buyers may reasonably decide to wait. But waiting also has risks. If mortgage rates decline, buyer demand could increase quickly, creating more competition and reducing some of the negotiating advantage buyers currently have. For buyers who can comfortably afford today’s payment, this may be a market where negotiating the right terms can sometimes be more valuable than waiting for a lower rate that may or may not arrive.

What Does This Mean for Sellers?

Sellers need to recognize that Prescott is no longer a market where nearly any property can be aggressively priced and still sell quickly. Prices are down modestly, and both pending and closed sales have declined by roughly 10%. Buyers are cautious and very sensitive to both price and monthly payment. However, sellers still benefit from relatively restrained inventory. With only 5.4 months of supply and fewer homes available than last year, sellers are not facing an oversupplied market. For homeowners who have a legitimate reason to sell, the current statistics do not necessarily suggest that waiting will produce a better result. Waiting for lower mortgage rates could bring more buyers into the market, but it could also encourage more homeowners to list their properties, creating additional competition. The most important strategy for today’s seller is realistic pricing from the beginning, strong presentation, and a willingness to consider incentives that help buyers manage their monthly payment.

Where Are the Leading Indicators Pointing?

Closed sales and median prices tell us primarily what has already happened. Pending sales are more forward-looking. Prescott pending sales declined about 10.3% from last year, suggesting closed-sales volume will probably remain relatively soft in the near term unless buyer activity improves. New listings, however, are essentially unchanged, while overall inventory is actually lower. That is important. If buyer demand continues declining but inventory remains constrained, the likely result may simply be fewer transactions and moderate price softness. The greater warning sign would be if pending sales continue falling while new listings and active inventory begin rising significantly. That combination would create considerably more downward pressure on prices. The indicators I would watch most closely are pending sales, new listings, active inventory, months of supply, mortgage rates, and mortgage purchase applications all of which point to the likelihood of lower home prices in the near term.

What could change that forecast? 1. Lower oil prices and resoltuion of trade/tariff disputes resulting in lower inflation rate 2. Lower interest rates (of course). 2. Continued decrease in inventory of homes for sale 3. Increase in pending sales.

So, Should You Buy, Sell, or Wait?

Check out these articles to help you answer those questions. SHOULD I BUY NOW! SHOULD I SELL NOW!