Clear blue skies and 78 degrees here in Sedona today – I guess that’s why people from all over the world like to come here in the Springtime.  Town seems packed with visitors, yet we’ve seen worse traffic – and trail conditions are fantastic for those of you that come here to hike and mountain bike.  I’ve been on a handful of hikes and rides in the last few weeks when we’re in peak season – and several times I still had the trail to myself.  It’s heaven out there right now. 

Workwise – the Sedona real estate market is hopping!  Main drivers still seem to be the ability to rent a house short term – (AirBnB or VRBO style).  I’d guess that homes can be priced 10% more for areas that allow short term rentals.  I’ll follow up with some stats in a bit to try to justify my numbers.  Overall – inventory for homes continues to be low – and price per square foot is on the rise.  Vacant land is showing some signs of life, so its not totally flatlined – but location is a key determining factor for sales and sales prices.  I’ve seen a few lots in West Sedona neighborhoods (Western Hills) sell for $160-180k.  That’s a pretty decent increase in the past few years.  These sales might be one-offs though because we’re not seeing lots of sales however. 

Today’s Market Stats

Sedona residential units on Market = 320

Residential Units already tied up with buyers (in escrow) = 97

Of the 223 available units = 193 homes, 21 condos and patio homes, 9 manufactured homes

If we limit the search to the city limits and take out Loop Road area and the VOC – there are 121 units available – 105 are single family homes. 

Price Breakdown of 105 homes within city limits

Under $500k – 7 homes

500k-700k = 24 homes

700k-$1M = 26 homes

$1M- 1.5M = 25 homes

$1.5M plus = 29 homes

That’s a lot of inventory of homes in the $1M plus range – so market time is considerably longer when the prices go up.  Often times we’ll see homes under $800k sell in hours or days of listing… if it’s priced right.  In lower price ranges – especially in areas that allow AirBnB’s – look for multiple offers on homes that come available if they’re priced close to true market value.  It helps to have a prequalification letter done by your bank or a local lender – but there are plenty of cases that a cash buyer will beat out any offers with financing contingencies.  Speak with your buyers agent about how to structure an offer that can compete with other offers!

Short term rental affect on pricing:

There’s probably a few ways of doing this – but I decided to evaluate EVERY home sale this year within the city limits.  There have been 65 homes that sold this year… and 46 of these are in areas that allow short term rentals.  The average price per square foot of these homes is $290.  If we take those out and examine the other homes that do not allow short term rentals – the average price per square foot is also $290.  Damn – what are the chances of that?? That evaluation didn’t work out.  My guess would be that the majority of the homes selling for AirBnB purposes is lower in value – but that their value is boosted by the ability to do short term rentals.  So, if larger homes in private and gated areas are selling for $290 psf – and the lower value homes in town are also getting that same $ – it’s got to be boosted by the availability of rentals.  Feel free to comment below with your thoughts or email me directly!