Spring Rebound
By: Victoria Wylde, MSE
As seen in Sedona Monthly
If you bought a property from Mid-year 2022 to now, congratulations. You’ve invested well. As 2024 rolls on, you can expect to see increasingly higher prices as the market climbs out of its 2023 valley.
Last month we reported seeing considerably more market activity than typical for the slow winter season. That began showing up in the statistics by the end of February. At that point, sales of single-family residences were up 43 percent over the same period in 2023 and the Median Record Selling Price of those homes was 18 percent higher. The sample size of those sales was relatively small, but they do offer a glimpse of the trend ahead and some support for the proposition that 2023 will be good for sellers and the market in general.
Buyers can take heart in another trend: housing inventory is going up. Although, perhaps, 25 percent below Pre-Pandemic levels, late-winter single-family home Active Listing was at their highest level since 2019. Typically, inventory starts building in late February and continues going up well into spring. Lack of supply has been one of the key supports for relatively high home prices even when the market had stalled in the past year and a half. One would anticipate, then, that expanding inventory should moderate price increases. But, that appears to be counter-balanced by a boost in demand.
Since the end of spring, 2022, large numbers of buyers appear to have been sitting on the sidelines, putting their dreams of a home in Sedona on hold. They may have been waiting for the market to crash for mortgage rates to come down or for any other scenarios to come to pass before making the purchase. Now that it’s clear that the hoped-for crash is not going to happen and interest rates are beginning to ease, that pent-up demand is beginning to make itself felt. An increase in the supply of available homes is also an incentive for buyers to come out and actually buy something rather than just kick tires. More options for buyers will spur increased sales and provide a healthier housing market for everyone.
The Vacant Land Market, however, remains in a state of limbo. The number of land sales did jump 44 percent in the first two months of the year, but those sales were mainly inexpensive lots, so their MRSP slipped 27 percent to $265,000 – pretty much their level for the latter part of 2023. High construction costs continue to discourage prospective buyers from purchasing land and building and those costs, at present, seem to be resistant to coming back to earth. But, the reality remains that precious little vacant land is left on our island surrounded by the National Forest and that is slowly being whittled away. Eventually, that dwindling supply will see its value skyrocket. It may be instructive to recall that the MRSP for land back in 2006 was $519,000.
Roy Eleutherios Grimm, PhD & Victoria Wylde are teammates at RE/MAX Sedona & now share this column. Roy@SedonaRealEstate.com; Victoria@SedonaLuxuryHomes.com
