#1 in Sedona Luxury Real Estate, for a Reason

When it Comes to Sedona Real Estate... You Can't Beat the Russ Lyon Sotheby's Buyer Brokers Team

Sedona Real Estate has been one of the hardest hit real estate markets in the country. While that's bad news for the Sedona Real Estate Seller, the time couldn't be better for the Sedona Real Estate Buyer. At Russ Lyon Sotheby's Buyer Brokers Group, we focus on getting our buyers the best deal possible, regardless of who the seller is.  That's our specialty and our promise to you.

If you're looking for a dream home in Sedona - which has been recognized as the most beautiful place to live in America, by USA Today - the time for smoking deals is here, now.  Prices have hit bottom and have stabilized there for the time being.  But, inventory, although still historically high, is shrinking (down 30% since last year) and buyer activity is rebouinding (numbers of home sales are up 36% from last year)

For Sedona Real Estate sites, the supply and demand balance has been uncommonly favorable to buyers particularly in the past three years and we’ve been able to negotiate some impressive bargains for our clients. The luxury home market was actually stronger here in 2006 and the first half of 2007 than it was in the banner year of 2005.  Since then, however, inventories have increased, the number of sales has plummeted, and we've seen some dramatic price drops, some of the largest in the country.  We have been able to capitalize on the strong Buyer’s Market, by getting some great deals for our buyers, even saving hundreds of thousands of dollars off the original listing price.

Yet the Long-term fundamentals of the Sedona Real Estate market are insulated from the next building boom for one reasons. Sedona, surrounded by nationally -protected forests has limited land available for development. We’re islands of private property surrounded by National Forest and there is no more room to expand. With these natural supply side barriers, the Sedona Real Estate buyer's investment is much safer over the long term, and again, with the pending government infusion of billions of dollars to prop up real estate prices, today can be called the perfect storm in which to buy Sedona Real Estate. It is our view that Sedona Real Estate Prices will never again be as low as they are right now.

Luxury Market Update

While the general real estate market was starting to crash and burn back in 2006 and 2007, luxury home sales (here defined as those over $1 million) were setting records. Sales in 2006 exceeded the previous peak established in 2005. By Mid-year 2007 luxury home sales were on a pace to out-do 2006. Then somebody flipped a switch. That switch was probably the sudden disappearance of “jumbo” loans (those over $417,000) The second half of 2007 saw a 60% decline in sales and they’ve been relatively depressed ever since.

Now that the rest of the single family home market has bottomed and witnessed a surge in sales since last spring, million dollar home sales have, again, been lagging behind the curve. This year we’ve seen over a 30% drop in sales compared with this time in 2008 – one of the worst years on record for general real estate – and well over a 60% fall-off compared with 2007.

Prices have fallen across the board, particularly when we look at sales prices compared with original list prices. For example, in the past six months I’ve represented buyers who paid, respectively: $850,000 for a short-sale first listed for $1,474,000 in 2007; $1,000,000 for a home that listed in 2006 for $1,995,000; and $2,350,000,000 for a grand residence that was asking $3,800,000 at the beginning of 2009.

The short-sale example leads us to an interesting discovery that reveals itself when we start excavating the rubble of the luxury market: It’s not so much that million dollar homes aren’t selling; for the most part they’re just not selling for a million dollars.

Sixteen residences have, indeed, sold in the million dollar plus range so far in 2009. Digging through 2009 home sale histories one-by-one at the end of October, however, I found 35 more that had started out being listed between $1,000,000 and $1,590,000, but which sold for less than a million. The Median Reported Sales Price for that group was only $710,000 – with a per square foot cost of a mere $204.

What happened? The foreclosure phenomenon finally caught up with the high end of the market.

Just as the luxury market appeared immune, for a year and a half, to the crash of the general housing market, it also seemed unaffected, for a time, by the wave of REO/foreclosures. No longer. 40% of the homes that originally listed at over a million, but which sold under that figure, were REO’s. Another 17% were short-sales.

That pulls down the statistics dramatically in of itself. But, competition from the REO’s also puts severe pressure on the non-distressed listings, pushing all prices down.

In order to compete, many luxury home sellers are now dropping their expectations and list prices below the million dollar mark right out chute. I observed a prime example of that recently when touring a $925,000 listing that would have been easily $1,400,000 in 2006.

One commonly accepted definition of a luxury home is that it places in the top 10% in sales price for any given geographical area. Back in 2006 the threshold for Sedona’s top ten percent was $1,150,000. Today it’s $785,000. That’s a 32% drop. So, at the same time that the rest of the housing market is rebounding, the luxury market is still feeling some distress.

Sellers need to know this if they care to be realistic. Buyers, too, should realize that this is an opportunity that’s not likely to come again. At a recent luxury home conference in Scottsdale a spokesperson for lenders indicated that jumbo loans are starting to make a come-back. Rates have come down and lenders are making them more widely available. Several of my clients have then in the works right now. That might just flip the switch back on in the near future – or, at least, turn up the rheostat. Could be time, as Jim Cramer says, to “back up the truck and load up.”

A Buyer’s Agent will help you make the best possible deal on your Sedona luxury home.

We work with you – the buyer – in a real estate transaction. That way, we have only your interests at heart. Our job is to help you find and buy the luxury property you want. And get you the best possible deal. And watch your back throughout the whole process. Unlike conventional agents, we don’t even have listings – so we’ll never be trying to sell you a property simply because it’s in the company inventory.

We're still Realtors, though, with access to all properties – on the market or not (see our MLS search utility above). And, as our many happy clients can attest, we do our job very well.

Our team leader, Dr. Roy Grimm, Is a Certified International Property Specialist, a Certified Luxury Home Specialist, the President of the Sedona Luxury Real Estate Professionals, has been recognized by Who's Who in Luxury Real Estate.  By a wide margin, he's also the top buyer's side agent in the Sedona.  So, you're sure of receiving top-of the line, personalized representation from well-connected professionals who are on your side, exclusively. All of this gives you the ultimate advantage in this volatile market.

So, if you're thinking about buying one of the beautiful, luxury homes on the market in Sedona, call or email us. We really are on your side, exclusively.

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