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.
From the Blogs
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.
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."
As per usual I've got some news for you on the Sedona real estate market - and my guess is that it comes as no suprise to anyone that follows our annual buying trends. Our market ramps up every spring and loads of homes get tied up with buyers and change hands shortly afterwards. As of this second there are:
446 residential units on the market in Sedona
99 in escrow with buyers ( 57 of them are priced under $500k / 36 are between $500k-$1M / 6 priced over $1M. )
347 are currently available
We can further break down the 347 available into:
12 manufactured homes
I can't tell you the last time I saw 100 homes in escrow in our local market, so that's a great sign for the health of the market and for both homebuyers and sellers. We seem to be in a sellers market for homes under $400k as inventory is low and sales numbers are high. It's technically a sellers market if there is less than a 6 month inventory of homes - and right now we're at approximately a 4 month inventory.
Another interesting item that I learned this week was WHERE our buyers come from. The results were from all purchases of Sedona property in 2015. During that time there were 455 total transactions - and a whopping 57% of them came from.... guess what state?? I know most of you want to say California - but it's not true - they only make up 11% of our Sedona buyers. Almost 60% of our buyers come from AZ. It's funny to hear people tell us we should advertise in the New York Times (2 buyers came from NY last year...) or China or a multitiude of other places - when the fact is - our buyers aren't coming from there. In fact in all of 2015, there were only 2 international buyers and they were both from Canada. I think that the myth of the international buyer is over...
As per usual, the Sedona Real Estate market ramped up on schedule and last week was one of the busiest in recent memory for home sales. This past weekend, there were 7 new listings that came on market and 7 that went pending with buyers. Overall we've got 400 total residential properties listed and 75 of them are already tied up with buyers. That leaves only 325 units available - 277 homes 34 condos and a dozen or more manufactured homes. Inventory is getting limited in the sub $300k price range - with only 35 properties currently available - and only 9 of these are single family homes. So, if you're shopping for a home in this range you'd be wise to hurry. I'd received an email a few weeks ago from a client looking for a SFR up to $325k - and there were 15 available at the time - and by the time he arrived there were only 10 left.
Between 300k-500k there's a load of activity and 61 available residential units on the market (single family homes, condos, townhomes and manufactured homes). With 82 sales in the last 6 months, it's technically a sellers market as we currently have less than a 6 month inventory of homes. That doesn't mean that prices are spiking, but we are seeing some homes pushing the upper limits of comparable sales (if they're in great shape, have views, and already modernized). Pricing is still important - so if you're considering putting a home on the market this spring, check with your agent about the range in which you should price your house.
Vacant land is still dragging along, with 347 lots currently available and 42 sales in the last 6 months - things are still favoring the buyers. Expect to get a good deal on a lot if you're a true buyer, but be warned... by the time you add up costs: design fees, impact fees, utility fees, engineering costs, and construction - you'll certainly be paying a premium for that new Dream home. It's still a better bargain to find an existing home that you'll like - and resort to buying a lot and building if you don't find a home that fits your needs.
Winter is upon us - although the 55 degree weather and clear blue skies hide the fact that the entire east coast of the US just got buried under a few feet of snow. Our winter real estate market should be fairly slow - if we use past years as a guide. However there are 343 residential units currently on the market in Sedona and 53 are tied up with buyers at this time. That means we only have 290 residential units available - broken down into 239 homes, 38 condos and patio homes, and more than a dozen Manufactured homes. Our lower end inventory is flagging - so look for prices to continue to rise in the sub $500k market. There are only 68 single family homes available in all of town - but if we cut out the VOC, Oak Creek Canyon and Loop Road areas and only look at the city limits - then we have only 26 available homes. Tight inventory for sure.
Both experienced agents and informed sellers realize that the market ramps up in activity levels in the beginning of March, so I'm sure there are a few dozen sellers in town waiting for the more active Spring market before they make their homes available on the open market. This is good, as there's a pent up demand for good homes priced at the current market value. I know that I've been saying this for a few years, but I'd also expect to see a little more activity in the vacant land market - as prices here have not made a comeback at all - so there's good investment opportunities in bare land if you're willing to build or holidng for long term.
Any questions or comments on the local real estate market - comment below or contact me directly! Happy 2016!