It’s the season to be joyful as well as thankful and most people who work in the Sedona real estate market are just that. The year might have started out slowly but it got better as the months drifted by and there are now signs of some dormant market sectors coming awake just in time for the New Year.
Newcomers to this article might not know that the Sedona Real Estate market is fairly predictable - with peaks in Spring and Fall and slow times in Summer and Winter. This Fall proved to be on target - with the exact same number of sales in October 2016 as October 2015... and YTD we're 12 sales + over last year - making a 4.4% increase. Inventory overall seems to be trending downwards... within the Sedona city limits, residential listings are down 27% over last year. That directly corresponds with the average price per square foot jumping 18% over the last year (for 86336 zip code at least). We're currently at 256 per square foot in October - compared to $215 psf in October 2015. Good times for sellers and smaller supply lead to shortened time on market and more competitive buying market. We're seeing multiple offers and tough competition for the best homes, with many buyers offering cash to trump any buyers that need a loan.
I was helping a buyer recently - and checking the number of available homes in Sedona shocked me. Single family homes under $450k in Sedona (86336 only)... there are only 20 homes currently available. That's a pretty small inventory of homes - so look for pricing to rise in the coming months. The Sedona market overallhas 285 homes on the market of which 63 are already tied up in escrow with a buyer - making a grand total of 222 homes available in all of Sedona (town and the VOC combined). There are an additional 44 condos/townhomes on the market - but 11 of those are tied up as well. I'd anticipate a stronger than normal winter season leading into a strong spring season... so if you're buying - look now as prices are trending upwards - and if you're selling - conventional wisdom says to wait until February, but inventory is low now - you might consider coming on the market sooner than later to take advantage of the lack of listings!
As we find ourselves in the middle of the busy fall season, it should be noted that it's on target with annual averages. There are currently 392 residential units on the market (includes homes, condos, townhomes, manufactured) and approximately 20% of the available homes are tied up with buyers. There are 85 homes in escrow, which leaves true available inventory at 307 units. If you look closely at the homes in the process of being purchased - the median price is approximately $500k. Of these 85 homes the average market time is 148 days on market - which is about a month shorter than the average market time to sell. This solidifies what I have been telling clients for the last year or so - "If it's priced well when it comes on the market it's often sold in a matter of days."
Inventory of available homes in the lower price ranges is shrinking rapidly - under $300k there are only 3 available homes and an additional 12 condos and townhomes. This is a major decrease in availability over the last year - and there's no end in sight for the upward movement of the lower end of our marketplace. There's a fair bit of interest in the mid range homes ($500k-$750k) with 26 homes currently tied up with buyers, 11 homes in escrow between $750k-$1M, and 4 homes over $1M. Most of the numbers are as expected, but the suprise is the $500k-$750k range coming in much healthier than it has been for the last few years.
The wildcard in the current Sedona real estate market is the January 1st rollout of the short term vacation rentals (see a prior RRN article here). I'm not sure of how this will play out - but there's already an increase in the number of vacation rentals available in Sedona as of January 1! There was also a recent article that showed that an apartment complex has posted eviction notices to tenants and were told that the complex will be rented out as short term rentals. I'm sure that we'll see more about this in the coming months, but a quick look at the inventory of rental homes shows that demand is very high. I'm predicting a rise in sales in the next few months as owners prepare to rent out for both short term and long term. Stay tuned...
I just returned from a road trip to Seattle to visit family and it struck me en route that the real estate market in many parts of the country is entering a new phase. We have survived the downturn with its significant price adjustments, we’ve burned through the distressed property sales phase, seen a comeback in prices — though not to pre-crisis levels in Sedona — and now there is pent-up demand spurring a construction surge in many parts of the country.
No matter what your mood after the Presidential election, the Sedona real estate market has something to lift your spirits and be thankful for. Both residential and vacant land sales are up in terms of unit sales but the Sedona and VOC zip codes are behaving somewhat differently, so let’s look at them individually.
Last month I commented on the amount of new construction I saw on my summer vacation to Colorado, Seattle and San Francisco. While Sedona does not have the same vibrant real estate market as those two large metropolitan areas, there’s still a lot happening in our little town.
Real estate reached a fevered pitch this springtime, but is quickly coming to a close. We've seen mulitple offers on homes, some being bid up past their listing prices - but the the most part I'd say that these homes were in the sub $600k price range - the meat of the market. There are currently over 100 homes already in escrow with buyers - so that translates into about 25% of our current inventory of Sedona homes is already spoken for. The market cools somewhat in the mid-range homes (from $600k-$1M), and the upper end homes (over $1M) has seen a recent uptick of activity - with 9 homes over $1M in escrow.
On another note - people often talk about international buyers - I think I debunked that myth last month's blog - but there is some evidence of international sellers this year. I've sold one home already for a Canadian seller this year - and we're getting ready to list another one. This article might explain why Canadians are selling homes. Fletcher Wilcox says: "If a Canadian bought a house in the U.S. in 2011 and paid $150,000 USD, they would have paid close to $155,000 CAD. In 2015, if that same property, because of appreciation, sold for $225,000 USD, a Canadian seller would receive $300,000 CAD, almost double what they paid in Canadian dollars in 2011. Quite a gain. So far in 2016, the Canadian dollar is even weaker against the U.S. dollar than last year."