Sedona AZ Real Estate Market Conditions

CURRENT:

Here's our latest Sedona Real Estate Market Statistical Report. 

For more context for comparison, scroll down to the bottom of this page for the Mid-Year Sedona Real Estate Report 2008.

August 2008
Sedona Arizona
Real Estate Market Report

Not much change in the stats from the Sedona Arizona Mid-Year Report that you will find at the bottom of this page. 21 Single Family Homes sold (versus 24 in July 2007).  But, we're still down 24% in numbers of homes sold compared with this time last year.
 
The most notable change is the drop in the Median Recorded Selling Price. The MRSP dove below the $500,000 mark for the first time since last winter.  It now sits at $493,250.  The lowest point was $475,000 toward the end of 2007.  The peak in the spring of 2006 was $660,000. So we are, happily for buyers, still down 25% from the top of the bubble.

That number is not likely to go up much by next month's report.  The median list price of the Pendings (under-contract) is $520,000, but the final Median Recorded Sales Price of that group is certain to be well below $500,000.
 
Only two Sedona Luxury Homes (i.e. homes selling for over $1 million) sold in July.  That gives us a drop, so far, of 56% compared with this time last year.  That percentage will improve, though, for a couple of reasons.
 
The first, though, is a negative.  The second half of 2008 should look better than the second half of 2007 because the Sedona luxury home swoon began at mid-year 2007.
 
The second reason is more positive.  Eight Sedona Luxury homes are presently under contract.  That's more than half the number sold so far this year.  If all of those Pendings close escrow, that will beef up the number of sales, but it'll also bring the currently over-inflated Price per Sq. Ft down a bunch.  Presently it's $421 (way up from last year's more normal $376).  The Median List Price Per Sq. Ft. of the Pendings is $350.  So, expect that figure to drop like a rock in the next month or two.
 
What can you say about the Vacant Land Market in the Sedona area?  It's nearly comatose.  Down now 17% from super-dismal 2007.  But, the MRSP has gone up 12% for Sedona land indicating that some of the more expensive lots are starting to sell a bit - but not so much the really high end ones.  Only seven of the 35 sales were $650,000 or above.  Three were a million or more.

Finally, Sedona Condos and Townhomes.  At least they're consistent.  Numbers of sales, MRSP, and Price per Square Foot are all down 17% from this time last year.

All in all, market conditions are ideal for buyers to swoop in and pick terrific bargains that will inevitably appreciate in value tremendously in the long-term.

All Single Family Homes:

# SOLD by 1 Aug.. 2003: 341
Median Recorded Sales Price: $325,000
Size: 2,040 sq. ft; Price per sq. ft: $159; Days On Market: 134

# SOLD by 1 Aug. 2004: 363
MRSP: $388,000
Size: 2,119sq. ft; Price per sq. ft: $183; DOM: 105

# SOLD by 1 Aug. 2005: 391
MRSP: $520,000
Size: 2,139 sq. ft; Price per sq. ft: $243; DOM: 60

# SOLD by 1 Aug. 2006: 235
MRSP: $590,000
Size: 2,052 sq. ft; Price per sq. ft: $288; DOM: 79

# SOLD by 1 Aug. 2007: 174
MRSP: $586,000
(List median: $599,900)
Size: 2,116 sq. ft; Price per sq. ft: $277; DOM: 114

# SOLD as of 1 Aug. 2008: 132
(down 24% from 2007)
MRSP: $493,250
(down 16% from 2007)
List median: $535,000
Size: 2,024 sq. ft;
Price per sq. ft: $244;
(down 12% from 2007)
DOM: 124

ACTIVE (1 July 08): 517
Median List Price: $675,000
Size: 2,391 sq. ft; Price per sq. ft: $282; DOM: 122

ACTIVE (1Aug. 08): 517
Median List Price: $679,000
Size: 2,400 sq. ft; Price per sq. ft: $283; DOM: 131

UNDER CONTRACT (1 July 08): 32
Median List Price: $477,000
Size: 1,920 sq. ft; Price per sq. ft: $248 DOM: 114

UNDER CONTRACT (1 Aug. 08): 34
Median List Price: $520,000
Size: 2185 sq. ft; Price per sq. ft: $240 DOM: 114

SF Homes Under $1,000,000
Sold: 117
MRSP: $470,000
$/Sq ft: $243

Luxury Homes ($1,000,000+):

# SOLD by 1 Aug. 2003: 18
MRSP: $1,350,000
Size: 4,596 sq. ft.; Price per sq. ft: $280; DOM: 248

# SOLD by 1 Aug. 2004: 21
MRSP: $1,200,000
Size: 4,232 sq. ft.; Price per sq. ft: $284; DOM: 234

# SOLD by 1 Aug. 2005: 35
MRSP: $1,250,
Size: 3,794 sq. ft.; Price per sq. ft: $329; DOM: 131

# SOLD by 1 Aug. 2006: 38
MRSP: $1,247,500
Size: 3,485 sq. ft.; Price per sq. ft: $358; DOM: 169

# SOLD as of 1 Aug. 2007: 34
MRSP: $1,377,500
(List Median: $1,485,000)
Size: 3,666 sq. ft.; Price per sq. ft: $376; DOM: 174

# SOLD as of 1 Aug. 2008: 15
(down 56% from 2007)
MRSP: $1,600,000
(List Median: $1,700,000)
Size: 3,800 sq. ft.;
Price per sq. ft: $421
(up 12% from 2007 – but not for long; see current Pendings)
DOM: 129

ACTIVE (1 July 2008): 121;
Median List Price: $1,550,000
Size: 3,841 sq. ft.; Price per sq. ft: $404 DOM: 142

ACTIVE (1 Aug. 2008): 118;
Median List Price: $1,550,000
Size: 3,821 sq. ft.; Price per sq. ft: $405 DOM: 131

UNDER CONTRACT ( 1 July 2008): 4
Median List Price: $1,253,000
Size: 3,396 sq. ft.; Price per sq. ft: $369 DOM: 132

UNDER CONTRACT (1 Aug. 2008): 8
Median List Price: $1,191,500
Size: 3,398 sq. ft.; Price per sq. ft: $350 DOM: 165

Vacant Residential Land:

# SOLD by 1 Aug. 2003: 168
MRSP: $160,000;
DOM: 207

# SOLD by 1 Aug. 2004: 270
MRSP: $199,000;
DOM: 210

# SOLD by 1 Aug. 2005: 241
MRSP: $360,000;
DOM: 98

# SOLD by 1 Aug. 2006: 97
MRSP: $515,000;
DOM: 82

# SOLD by 1 Aug. 2007: 42
MRSP: $297,000;
(List Median: $329,000);
DOM: 213

# SOLD by 1 Aug. 2008: 35
(down 17% from 2007)
MRSP: $332,500;
(up 12% from 2007)
(List Median: $350,000);
DOM: 183

ACTIVE (1 July 2008): 382
Median List Price: $399,000;
DOM: 209

ACTIVE (1 Aug 2008): 396
Median List Price: $399,900;
DOM: 206

PENDING (1 July 2008): 5
Median List Price: $249,000;
DOM: 194

PENDING (1 Aug. 2008): 3
Median List Price: $550,000;
DOM: 193

Condos/Townhomes

# SOLD by 1 Aug. 2003: 80
MRSP: $209,250
Price per sq. ft: $167

# SOLD by 1 Aug. 2004: 74
MRSP: $250,000
Price per sq. ft: $189

# SOLD by 1 Aug. 2005: 56
MRSP: $288,000
Price per sq. ft: 242

# SOLD by 1 Aug. 2006: 50
MRSP: $411,500
Price per sq. ft: $304

# SOLD by 1 Aug. 2007: 40
MRSP: $365,000
Price per sq. ft: $287

# SOLD by 1 Aug. 2008: 33
(down 17% from 2007)
MRSP: $303,000
(down 17% from 2007)
Size: 1272
Price per sq. ft: $238
(down 17% from 2007)

ACTIVE (1 July 08): 119

ACTIVE (1 Aug. 08): 126

PENDING (1 July 08): 7

PENDING (1 Aug. 08): 8

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 late fall of 2007 was $475,000.  Currently, the median price for a home in Sedona stands at roughly $493,250. 

As in most paces around the country, however, the Sedona real estate market stalled in 2006 and 2007 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. Currently the median selling price is roughly $303,000.  That's down 17% from mid-year 2007.

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) in the first half of 2007, but a 33% jump in the second half of the year.  That figure currently stands at about $332,500 for now. 

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 2008, 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 about to see a fall 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 will BOTTOM this year.

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 $175,000 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 four 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 $350,000 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 $250,000 (the median price of a home there) 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