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.
In Sedona, by which I refer here to the 86336 zip code, the residential median sales price year to date (YTD) stands at $450,000, which is up 3% over a year ago. Further encouraging statistics are that the number of units sold YTD is up 4% at 287 homes, the average sold price per square foot is up 5% at $235 and the average days on market of the sold homes is 126 days which is down 12% from 2015. Remember however that these are average numbers and disguise continuing weakness in higher price ranges, though there was a flurry of sales in October in this segment with 7 recorded over $800,000, the second best month of the year after 8 in September – are we seeing the start of a rally?
Land sales in this zip code have not performed as well as the residential market. The YTD average sales price of a building lot stands at $137,000, which is down 2% from 2015 and unit sales YTD are down 4% at 68 with a huge inventory of 257 units, which holds back prices and consumer confidence.
The VOC residential market, the 86351 zip code, has really been the star performer of the year. The YTD median sales price is up a whopping 19% at $422,000 but unit sales in the same period are down 9% at 163 homes sold. What explains this odd state of affairs? I put it down to a problem we’ve been experiencing for several years – a lack of choice/inventory to attract buyers. However, the average sold price per square foot YTD is up a healthy 6% at $208 and the average market time at 121 days is down 15% from last year.
Lot sales in the VOC show some similar characteristics to home sales. Unit sales YTD are up 21% at 34 but the average price is down 6% at $113,000 and in this instance it’s a case of too much inventory, not too little; there are 107 lots on the market which is about a 3 year’s supply - definitely a buyer’s market.
On a final note, mortgage interest rates are at a high for the year and will probably continue to rise. Historically this has prompted buyers to get off the fence and buy now before they get priced out of the market – a 1% rate increase reduces a buyer’s purchasing power by 10%! Why is this happening? I read an explanation in The Economist which rang true with me – the new administration’s proposed infrastructure spending and tax-cuts will probably lead to a pick-up in inflation and investors are demanding a higher rate of interest on borrowed money to protect their return.
This month’s Real Estate Review was written by Andrew Brearley, managing broker at Coldwell Banker Residential Brokerage……
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