Sedona Real Estate Market Update February – March 2024

A tough year and a half in the rearview mirror and optimistic road signs for 2024.

Total 2023 sales of single-family residences came in at 365 – down 16% from 2022 -the lowest since 2009. The Median Recorded Selling Price of those homes finished the year at $985,000 –6% lower than in 2022.

2022 saw a record year for sales and prices – in the first half. That fizzled out in the fall. With weak pending sales in January 2023, the rest of the winter saw little improvement.  1st Quarterracked up only 73 sales with a MRSP of $930,943. Late spring 2023 saw significant strength and an MRSP of $999,000 for the first half of the year. Instead of gathering momentum, though, that rally once again petered out as the MRSP slipped to $977,500 for the second half of 2023.

Townhome/Condo sales, for once, mimicked single-family home sales with similar declines in sales numbers and MRSP.

Vacant Land, however, saw a 39% drop in sales numbers and a 12% MRSP decline.

All in all, the past year and a half was, indeed, a propitious interval for buyers regardless of market sector. It will be a long time before we see a market as soft as that.

That’s changing in 2024. Even this winter, our slowest season, we saw far more buyer activity, inquiries, and showings, than is typical. That translates into more sales ahead. Agents in the field report a notable change in buyer attitudes. More consumer confidence in the economy and a realization that the market has bottomed out and prices are bound to go up -so it’s finally time to buy what they want and get on with their lives.

Rolling into spring, expect increasing sales as mortgage rates ease, price increases, and the release of pent-up demand that had built up for the past year and a half. That 25% of the buyer pool who have held off purchasing a property because they’ve believed that the market was bound to crash, will finally have to let go of that notion as prices advance. Further delays in purchasing could simply cost prospective buyers more money.

Well-respected market analysts like Dr. Lawrence Yun, Chief Economist for the National Association of Realtors, and MikeSimonsen, CEO of Altos Research reflect a growing consensus among the national and regional experts. Predicated on gradually declining mortgage rates ahead for the next year or two, they predict a soft 1st Quarter real estate market followed by a surge in the 2nd Quarter, followed by increasing momentum for the rest of the year and well into 2025.

Some buyers may think it’s sensible to hold off purchasing until mortgage rates decline substantially, but the reality is that as rates go down, prices are likely to go up faster. Many will have the epiphany that it’s more sensible to buy or sell a property when it suits the needs of the family rather than trying to game the market.