Currently the market is not "soft". With the foreclosure arena diminishing substantially, the homes in Prescott are on solid footing. There are those who believe that they can sell for 2005 prices (which is also a false expectation) but in general... low inventory (increasing during summer) and a higher demand for quality housing with very few distressed properties to pick from, the market is more likely to be a seller's market.
I say this all "with a grain of salt". Fluctuations in the marketplace are felt in Prescott because of its size. High dollar home sales can off-set the entire market making some homes appear more valuable than they really are. The result: a rush to sell for more money. People then enter into the marketplace believing they can get lucky. It's just not going to happen.
So, as a buyer, if you're looking to buy in an over saturated market in Prescott with desperate sellers... you may have just missed out. That market started to dry up Feb of 2012 as the foreclosure market dropped below the traditional sale market percentage-wise. November 2013 was the lowest recorded month for REO properties in 5 years. August 2014 was the lowest for short-sales in 5 years.
Watch real-time stats: http://prescottarizonahouses.com/prescott-az-marketing-statistics/
seems like the market is doing quite well.
Let me know if you need help