Where will Sedona’s real estate market go in 2008?

That’s a question a lot of people would like answered, but one that depends on unpredictable factors.

Where will Sedona’s real estate market go in 2008?

That’s a question a lot of people would like answered, but one that depends on unpredictable factors.

“It’s an election year and some prospective buyers might wait to see the outcome,” said Ed Pennington, of Buyer Brokers Realty of Sedona.

Pennington works with his wife, Laura, as a team and together they were the top buyers’ agents in Sedona and Northern Arizona for the last four years, he said.

“Statistics for 2007 will show that the overall Sedona market was slow with a capital ‘S’ in 2007,” Pennington said. “Vacant lot sales were down 48 percent by the end of November and the number of homes sold that were under $1 million were down by 34 percent.”

Final numbers aren’t out yet for December’s property markets, but Pennington said there was a flurry of activity in the final four weeks and into January.

“Lower interest rates and lower prices seem to be attracting people who realize that Sedona is a good buy right now,” Pennington said.

Election years have historically been good to the real estate market, giving it a strong boost in the latter months of every campaign except one in the past 50 years, according to statistics compiled by the Real Estate Connect Conference of 2008, but, there are other significant economic currents that will affect 2008.

A bipolar stock market that lurches between despair at the sub-prime fallout to cheery albeit temporary upswings at any hint of interest rate reductions isn’t giving timid investors sustained confidence to commit to a 30-year mortgage.

However, interest rates are at a five-year low, and Sedona’s generally upscale market has many positive forces behind it, according to Tony Harper, owner of Anthony Harper Real Estate.

“Sedona has no significant backlog in foreclosures as compared with other cities in the state because our local lenders have no propensity to make bad loans,” Harper said. “In addition, we have demand from many people who currently live in Phoenix and are looking to get out of the city and into a suburban setting.”

Fred and Ann Shaylor own Shaylor Home Loans in Sedona. From a lender’s perspective, they agree with Harper’s assessment.

“Low interest rates make it conducive for potential buyers to get a loan, but we are very selective,” Fred Shaylor said. “Sedona has a wide variety of properties, everything from multi-million dollar homes to manufactured homes and the people we’re seeing are quite happy with what they’re buying. We’ve had few cancellations.”

Total loan volume in 2007 was down from the previous year, according to Shaylor, and he said he believes the 2008 market will stay about the same.

One factor that could impact local prices is the number of new developments and subdivisions that come on the market, competing with existing homes to attract buyers.

The offerings comprise an aggregate of condominiums, town homes and vacant land.

Paul Galloway, principal of Galloway Realty, recently got the go-ahead for his mixed-use project on Airport Road that includes five condos and 10 building lots and his Piñon Drive project, in its current iteration, plans 23 condos.

Phase I of Park Place is wrapping up, offering 14 condos to the immediate mix at its project on Hwy. 89A and plans to construct 74 additional units.

Across town, on Hwy. 179, Don Campbell has applied to the city to replace his Oak Creek Mobile Lodge with a 50-unit housing complex, while Bella Terra, situated on Upper Red Rock Loop Road southwest side of Sedona, looks to add 104 housing units.

Oak Creek Canyon has its share of developers as well with owners of Lomacasi and Don Hoel’s Cabins both preparing plans for new developments.

Building lots are also hustling to the market, and buyers who yearn to design their own home can choose from The Aerie with 74 building lots, La Merra which offers 38 homesites, 15 lots in Phase I of Spring Creek Ranch, half a dozen lots on the market in Cross Creek Ranch, 16 lots at Cor D’Amor, and CR Ranch with 88 original building lots, some of which are either sold or now under construction, among others.

Pennington doesn’t see the addition of these opportunities as a problem going forward.

“They’ve all come about in a slow market which hasn’t allowed them to have a big effect,” Pennington said. “[But], they will in the future, and I believe it will be very positive.”

Harper said local home prices have remained strong despite the influx.

“The price of homes in Sedona is proportionate to their value,” Harper said. “I’ve seen no great reduction in price and buyers are getting better quality in materials and construction than they would get in the Phoenix market.”

Susan Johnson can be reached at 282-7795, Ext. 129 or e-mail sjohnson@larsonnewspapers.com