Sedona AZ Real Estate Market Conditions
CURRENT:
Here's our latest Sedona Real Estate Market Update & Statistical Report:
Sedona Mid-Year 2009
Real Estate Market Report
The Sedona Real Estate Market numbers are in for the first half of 2009. Essentially, they substantiate a continuation of the trend that we've seen since the market bottomed in January: 1. The Median Recorded Selling Price of Single Family Homes stabilizing in the low $400,000 range since February (after reaching $660,000 in April, 2006); 2. Closed Sales 23% ahead of last year; 3. Pending Sales hitting record levels we haven't seen since 2005; 4. REO's (foreclosures) and Short-sales making up well over a third of the closings and two-thirds of the Pendings; 5. Inventory continuing to decline; 6. The luxury home market lagging well behind the rest of the market; 7. The condo market sluggish; 8. The land market continuing to languish in the doldrums.
At first blush, it would seem that we have made the transition away from the Buyer's Market in Single Family Homes as inventory decreases and buyers show up in significant numbers. Despite that, however, prices continue to bounce along relatively close to the bottom. The wild card throwing off the typical supply and demand formula is the persistent and increasing presence of REO's (and to a lesser extent, Short-sales). Those foreclosures often come into the inventory at well below the normal market value. The non-bank-owned listings are forced to compete if they hope to ever sell. Thus prices are depressed when they would usually be rising.
A quick note on Short-sales (pre-foreclosure listings): they're the "red herrings' of the market. They look like and and usually priced like REO's and attract plenty of attention. But, for the most part, they're a waste of everyone's time. The banks simple don't seem to be interested in letting them sell. They appear to prefer to let them go into foreclosure. Only 5% to 10% of those "under contract" ever actually close escrow. Once in a while one closes and gives rise to new hope that the banks have wised up, but that hope is usually dashed in the next failed transaction. Do I sound frustrated and a little bitter? Guess I am. The irrationality of that process is infuriating.
With all the Short-sales in the inventory which will eventually go to foreclosure, expect that REO's will continue to be a strong presence in the market. REO's have their own downsides, but often yield fabulous deals for the dogged buyer with a high tolerance for bank arrogance, bizarre policies, and delays. In any case, they'll be a drag on prices for some time to come and provide some outrageous opportunities for buyers.
Single Family Homes
# SOLD Jan-Aug. 2004: 429
Median Recorded Sales Price: $400,000
$/sq.ft: $190
# SOLD Jan-Aug. 2005: 442
Median Recorded Sales Price: $522,000
$/sq.ft: $244
# SOLD Jan-Aug. 2006: 300
Median Recorded Sales Price: $590,000
$/sq.ft: $288
# SOLD Jan-Aug. 2007: 196
Median Recorded Sales Price: $573,500
$/sq.ft: $273
# SOLD Jan-Aug. 2008: 152
Median Recorded Sales Price: $493,250
$/sq.ft: $242
# SOLD as of 31 Aug. 2009: 207
(152 as of 31 Aug. ’08 - up 36%)
Median Recorded Sales Price: $422,500
(Down 14% from 31 Aug. ’08)
$/sq.ft: $192
(Down 21% from 31 Aug. ’08)
Includes
64 Foreclosures [aka, REO’s] (31%)
(MRSP: $325,500; $/Sq.ft: $154)
19 Short-sales (9%)
(MRSP: $445,000; $/Sq.ft: $192)
124 Non-REO’s/Short-sales (60%)
(MRSP: $477,500; $/Sq.ft: $210)
Price Bottom: Jan. 2009 $341,500
# ACTIVE
30 June 08: 517
1 Sept. 2008: 530
31 Dec. 08: 459
# ACTIVE (Sept. 09): 371
(down 30% from 1 Sept. 2008)
Median List Price: $625,000
$/sq.ft: $247
Includes
20 REO’s (5%)
(Median List Price: $380,000; $/Sq.ft: $144)
25 Short-sales (7%)
(Median List Price: $359,000; $/Sq.ft: $160)
# PENDING (1 Jan. 09): 15
MRSP: $479,900
$/sq.ft: $221
# PENDING (Sept. 09): 87
(33 on 31 Aug. 08 – up 161%)
*( 74 on 1 June 05)
Median List Price: $389,000
$/sq.ft: $192
Includes
16 REO’s (19%)
(Median List Price: $354,000; $/Sq.ft: $142)
31 Short-sales (36%)
(Median List Price: $349,000; $/Sq.ft: $179)
Luxury Homes ($1,000,000+)
# SOLD Jan-July 2004: 25
MRSP: $1,200,000
Size: 4300 sq. ft.; $/sq.ft: $279
# SOLD Jan-Aug. 2005: 38
MRSP: $1,275,000
Size: 3,826 sq. ft.; $/sq.ft: $333
# SOLD Jan-Aug. 2006: 43
MRSP: $1,245,000
Size: 3,570 sq. ft.; $/sq.ft: $349
# SOLD Jan-Aug. 2007: 37
MRSP: $1,360,000
Size: 3,813 sq. ft.; $/sq.ft: $357
# SOLD Jan-Aug. 2008: 18
MRSP: $1,542,500
Size: 3,782 sq. ft.; $/sq.ft: $408
# SOLD Jan-Aug. 2009: 13
MRSP: $1,550,000
Size: 4,395 sq. ft.; $/sq.ft: $353
(1 Short-sale)
# ACTIVE (Sept. 09): 89
Median List Price: $1,550,000
Size: 3,52 sq. ft.; $/sq.ft: $392
(no REO’s or Short-sales)
# PENDING (Sept. 09): 4
Median List Price: $1,340,000
Size: 4,338 sq. ft.; $/sq.ft: $309
Vacant Residential Land
# SOLD Jan-Aug. 2004: 315
MRSP: $207,500
# SOLD Jan-Aug. 2005: 269
MRSP: $360,000
# SOLD Jan-Aug. 2006: 100
MRSP: $515,000
#SOLD Jan-Aug. 2007: 47
MRSP: $350,000
# SOLD Jan-Aug. 2008: 37
MRSP: $332,500
# SOLD Jan-Aug. 2009: 46
MRSP: $121,000
# ACTIVE (Sept. 09): 422
(vs. 382 on 30 June 08)
(23 REO’s; 7 Short-sales)
Median List Price: $349,000
# PENDING (Sept. 09): 60
Median List Price: $299,000
(most are Cor d’Amor)
BACKGROUND:
Homes:
In May of 2003 USA Today's Weekend edition ran an article
entitled, "The Ten Most Beautiful
Places in America." Guess who was
number one on the list?
The effects on the Sedona real
estate market are not hard to guess.
Since 1996 the median selling price
of single family homes in the Sedona area has
been going up at an average rate
of over 12% a year. In 2007, though, the median went down 9%. The first time ever that we've seen a decline in that figure. Between Mid-year 2007 and Mid-year 2008,it's down another 12%. The apex of the price curve was $660,000 in the spring of 2006. And, the bottom in January 2009 was $341,500. Currently,
the median price for a home in Sedona
stands at roughly $425,000.
As in most paces around the country,
however, the Sedona real estate market
stalled in 2006 and took a decisive
swing back to being a Buyer's
market. There are
four times as many homes and lots
on the market now than there were
in 2005 and prices have definitely and deeply
softened for the time being.
Buyer's do have the clear advantage now
and they are beginning to return
in strength to follow up on that
advantage. Time to blow
into town if you want to snag a
bargain. The longterm prospects
for prices here are astronomical.
Sedona townhomes and condominiums are popular here since
a large percentage of our buyers
purchase second homes and condos
are ideal for that.
Sedona vacant residential
lots have appreciated
at an average annualized rate of
21% a year since 1996. The median
price soared to over $500,000 in 2006,
but that came back to earth
(below $300,000) starting in the first half of 2007. Currently the land market is really sluggish and great deals can be had there.
Scroll way on down for the full set of market statistics in historical perspective...
FUTURE:
The General Outlook: for Real Estate in the Sedona Area
2006 shaped up to be a year
in which the pendulum swung back toward
the Sedona real estate buyer. That continued through
2007 and so far in 2008. Inventories of homes and land
are, as I mentioned, way up.
And, they stay on the market longer.
Overall numbers of sales are off
by 66% compared with 2005. In short, in 2009, Sedona still has
a strong Buyer's Market - for now. We've finally seen sellers back
off their list prices in earnest and be open to hard bargaining . That makes for a
golden, but temporary opportunity
for the buyer. Longterm, though,
I think that we can expect a hyperbolic
market ahead for at least another couple decades
based on our local market
fundamentals, very limited supply
and strong demand. Prices will go
sky high within this decade and
stay there. Right now is probably
the buyer's best opportunity to
get in with the expectation of phenomenal
capital gains. Read more about the end of the housing crisis from the Wall Street Journal.
Short-term
We are seeing some remarkable activity in the market lately that leads me to believe that we're seeing a spring surge in Sedona market even if the national market is still flopping. Since last fall we've had as many clients visit for a reconnaissance as we had back in 2005, but most decided to hold off until they felt the market had bottomed. There has been a huge backlog of buyers building - all waiting for the same thing. Guess what? With the drop in the Fed rates and mortgage rates combined with a number of other government initiatives (like raising the limit on jumbo mortgages) and bail outs of the credit industry AND Sedona's long term prospects for appreciation, our sophisticated buyers are picking up the sense that we're about to turn the corner here. You heard it here first: the Sedona real estate market has BOTTOMED.
Long-term
So what generally drives the Sedona real estate market in the long-term? Economics 101,
Supply and Demand theory in action.
Sedona is an island of private land
surrounded by National Forest and
the supply is shrinking inevitably. Demand is
being pushed by the demographics of
the Baby Boom. The majority of our
clients these days are Boomers in
their 50s. They're buying land and
second homes with an eye toward retirement
in a few years. The forty-year-olds
are just starting to appear. This
demographic phenomenon is likely to
continue for another couple of decades,
ultimately pushing prices to unimaginable heights
as the supply of land runs out.
Land:
"Buy
land. God ain't makin' anymore of
it."
Will Rogers' famous quotation is especially true in the Sedona AZ real
estate market.
Back in 1996, the median
selling price of a Sedona residential lot
was $86,250. As noted above, it's
now about $350,000. The current flat market is, in my opinion, merely a short-term pause in an eventual massive
move up. Many local and national
observers see Sedona's real estate
situation as akin to Aspen's twenty
or thirty years ago as we anticipate
a virtual sell out of Sedona's vacant land
within a decade or so, once the market recovers.
Many of our clients are buying
property now as a hedge against
what they know will be a dramatic
run up in prices over the next few
years. Some are buying second homes
that they can use for vacations
or rent out with long term leases
or as short term vacation rentals.
Others are opting to simply buy
land to build on later. There is
a longstanding debate over the virtues
and hassles of building a home,
but many people are willing to persevere
to customize a home to their own
tastes and there are several outstanding
builders and architects in Sedona
that I am happy to recommend.
It is possible, by the way, to
spend well over three million dollars
for a one acre lot at the new Seven
Canyons Resort and Club. And, you'll
need another $125,000 if you want
a membership in the very upscale
and exclusive private Golf Club.
They have recently opened a world
class, Tom Weiskopf course. When
they first began marketing 20 lots
at a million an acre six years ago, my thought was: "This
is where Sedona is going in the
future, but those prices are way
premature." I was wrong. They sold
most of those lots in six months.
Next year they'll bring out their
last ten lots along the ridge above
the course at prices ranging from
three million and up. There definitely
is a sense in Sedona that , in spite of the current inventory, there
will be relatively little Sedona vacant land left
and once we're built out, prices
like those at Seven Canyons will
be the norm as they are in places
like Aspen, Jackson Hole, and Carmel.
At the moment, though, a luxury
building site, which may be a small
envelope at Casa Contenta or a little
under an acre at Back O' Beyond,
or one acre plus at Cathedral Rock
Ranch or two acres bordering National
Forest at the new Cross Creek Ranch
start at about $300,000 and
can range up to well over two million
dollars. What you can expect from
them are stupendous views, gated
privacy, and multi-million dollar
homes in the neighborhood.
In any case,
there remains, for the moment, an
excellent,but finite supply of land in Sedona and prices have plummeted.
Properties Outside of Sedona -The Verde Valley & Flagstaff Real Estate:
In areas such as Lake Montezuma , Oak Creek Valley , Camp Verde , Cornville, and Cottonwood , home prices are significantly lower and $200,000 will still buy a fairly nice house. The average sales price of a single family house in the rest of the Verde Valley is less than half of that in Sedona. Of course, you sacrifice the dramatic red rock views and ambiance of Sedona, but it does make economic sense and there are some spots with dramatic settings of their own, all within twenty or thirty minutes of Sedona. Many people, understandably, prefer some of the delightfully green hidden valley spots along Oak Creek or the Verde River with their big trees and sounds of gurgling water although water-front property can also get very expensive.
In fact, a housing construction boom has taken place in the Verde Valley in recent years with so many people wanting the beauty, climate, and lifestyle here without the Sedona prices. A good example of this is the rather large, but tasteful, development called Verde Santa Fe being built around the new golf course near Cornville between Sedona and Cottonwood . From there it's about a 15 to 20 minute drive A modern southwestern style house or townhome with great views of the mountains can be purchased or built to your specifications on or near the golf course at a cost ranging from less than $200,000 to the $400,000s. Presently there is a huge over-abundance of supply there with both resales and new construction. I think they're a good value. Remember that it is just as important for you to have buyer broker representation at new home developments and with "spec house" builders as it is on home re-sales.
27 miles to the north of Sedona is Flagstaff. In spite of its proximity, it's a world away; as different from Sedona as is Phoenix on the opposite extreme. At 7,000 feet, it's an alpine climate with real winter and a decent ski area. The median price of a home there is about $350,000, so there's more bang for your buck and lots of pine trees if you don't mind snow.
If you'd like to explore that option, visit our Flagstaff real estate site at: www.FlagstaffBuyerBrokers.com. Or, call us at the toll free number below.
For clients interested in these alternatives, Buyer Brokers Realty of Sedona & Flagstaff can find you the best buys, in the nicest locations throughout the Verde Valley and Flagstaff.. Give us a call at (800) 282-2959 or email us at: info@SedonaRealEstate.com. We will send you full reports and be your guide to the Verde Valley.
Here are recent market statistics which also show the historical trends:
Mid-Year 2008
Sedona AZ Real Estate Market Statistics
Single Family Homes:
# SOLD by 1 July 2003: 275
Median Recorded Sales Price: $330,000 (List median: $331,000)
Size: 2,077 sq. ft; Price per sq. ft: $159; Days On Market: 129
# SOLD by 1 July 2004: 308
Median Recorded Sales Price: $380,000 (List median: $381,000)
Size: 2,089sq. ft; Price per sq. ft: $182; DOM: 107
# SOLD by 1 July 2005: 345
Median Recorded Sales Price: $520,000 (List median: $530,000)
Size: 2,150 sq. ft; Price per sq. ft: $242; DOM: 63
# SOLD by 1 July 2006: 235
MRSP: $595,000 (List median: $600,000)
Size: 2,051 sq. ft; Price per sq. ft: $290; DOM: 79
# SOLD by 1 July 2007: 150
MRSP: $580,000 (List median: $599,450)
Size: 2,099 sq. ft; Price per sq. ft: $276; DOM: 114
# SOLD as of 1 July 2008: 111 (Down 26% from 2007)
MRSP: $509,500
(down 12% from 2007)
List median: $549,000
Size: 2,026 sq. ft;
Price per sq. ft: $251;
DOM: 125
ACTIVE (1 July 07): 463
Median List Price: $699,000
Size: 2,316 sq. ft; Price per sq. ft: $303; DOM: 103
ACTIVE (1 July 08): 517
Median List Price: $675,000
Size: 2,391 sq. ft; Price per sq. ft: $282; DOM: 122
UNDER CONTRACT (1 July 07): 38
Median List Price: $625,000
Size: 2,037sq. ft; Price per sq. ft: $294; DOM: 149
UNDER CONTRACT (1 July 08): 32
Median List Price: $477,000
Size: 1,920 sq. ft; Price per sq. ft: $248 DOM: 114
Luxury Homes ($1,000,000+):
# SOLD by 1 July 2003: 16
MRSP: $1,287,000 (List Median: $1,445,000)
Size: 4,596 sq. ft.; Price per sq. ft: $280; DOM: 248
# SOLD by 1 July 2004: 18
MRSP: $1,182,000 (List Median: $1,297,000)
Size: 4,051 sq. ft.; Price per sq. ft: $292; DOM: 221
# SOLD by 1 July 2005: 30
MRSP: $1,250,000 (List Median: $1,285,000)
Size: 3,794 sq. ft.; Price per sq. ft: $329; DOM: 129
# SOLD by 1 July 2006: 35
MRSP: $1,245,000 (List Median: $1,295,000)
Size: 3,444 sq. ft.; Price per sq. ft: $361; DOM: 167
# SOLD as of 1 July 2007: 30
MRSP: $1,318,000 (List Median: $1,420,000)
Size: 3,509 sq. ft.; Price per sq. ft: $376; DOM: 154
# SOLD as of 1 July 2008: 13
MRSP: $1,600,000
(List Median: $1,700,000)
Size: 3,800 sq. ft.;
Price per sq. ft: $421;
DOM: 140
ACTIVE (1 July 2007): 121
Median List Price: $1,575,000
Size: 3,526 sq. ft.; Price per sq. ft: $447; DOM: 123
ACTIVE (1 July 2008): 121;
Median List Price: $1,550,000
Size: 3,841 sq. ft.; Price per sq. ft: $404; DOM: 142
UNDER CONTRACT (1 July 2007): 6
Median List Price: $1,585,000
Size: 3639 sq. ft.; Price per sq. ft: $436; DOM: 306
UNDER CONTRACT (1 July 2008): 4
Median List Price: $1,253,000
Size: 3,396 sq. ft.; Price per sq. ft: $436; DOM: 132
Vacant Residential Land:
# SOLD by 1 July 2003: 157
MRSP: $157,000; (List Median: $169,000); DOM: 215
# SOLD by 1 July 2004: 224
MRSP: $201,000; (List Median: $205,000); DOM: 199
# SOLD by 1 July 2005: 203
MRSP: $359,000; (List Median: $365,000); DOM: 98
# SOLD by 1 July 2006: 89
MRSP: $515,000; (List Median: $539,000); DOM: 86
# SOLD by 1 July 2007: 35
MRSP: $296,000; (List Median: $319,000); DOM: 213
# SOLD by 1 July 2008: 29
MRSP: $345,000;
(List Median: $420,000);
DOM: 217
ACTIVE (1 July 2007): 398
Median List Price: $495,000;
DOM: 171
ACTIVE (1 July 2008): 382
(vs. 106 on 1 July 2005);
Median List Price: $399,000;
DOM: 209
PENDING (1 July 2007): 10
Median List Price: $549,000;
DOM: 178
PENDING (1 July): 5
Median List Price: $249,000;
DOM: 194
Condos/Townhomes
# SOLD by 1 July 2003: 62
MRSP: $224,000
;Price per sq. ft: $165
# SOLD by 1 July 2004: 68
MRSP: $250,000
Price per sq. ft: $189
# SOLD by 1 July 2005: 49
MRSP: $290,000
Price per sq.. ft: 241
# SOLD by 1 July 2006: 45
MRSP: $415,000
Price per sq. ft: $307;
# SOLD by 1 July 2007: 33
MRSP: $360,000
Price per sq. ft: $293
# SOLD by 1 July 2008: 31
MRSP: $304,000
Price per sq. ft: $239
ACTIVE (1 July 07): 135
ACTIVE (1 July 08): 119
PENDING (1 July 07): 3
PENDING (1 July 08): 7
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