Fall Back; Spring Forward
By: Victoria Wylde, MSE
As seen in Sedona Monthly
The first half of 2024 was promising for Sedona home sellers and the real estate market. Although not particularly gang-busters, it was upbeat compared with lackluster 2023; 10 percent stronger, in fact, in both numbers of home sales and price appreciation. Despite a dismal summer, the fall of 2024 flashed a few signs that we could expect a modest autumn surge. Prospective buyers were making reservations to come view a property and pending sales were picking up. Once again, though, the hoped-for rally didn’t quite materialize, at least not in early autumn. In fact, nationally and locally, we saw sales numbers sink in September. Most of October continued to be slow, but activity did start to kick in at the end of the month and into November.
In the meantime, the trend of increasing housing inventory has continued to gain momentum. By the end of October, we saw 183 single-family residence listings – just 13 percent fewer than in 2019 – so, back to “near-normal,” if such a concept still exists. More inventory, though, is a double-edged sword. An upswing in choice attracts buyers to return to the market, especially as mortgage rates taper off. At the same time, it encourages competition among sellers and tends to moderate prices. But that prospect, too, lures more buyers and we are seeing, lately, a proliferation of offers well below list prices. That said, there is a sizeable reservoir of prospective buyers who have delayed their purchases for a number of reasons. Those buyers will hit the market in increasing numbers throughout the months ahead and likely bring balance to the housing market thanks to the Law of Supply and Demand.
A sub-set of the housing market experiencing extreme aberrations in the Law of Supply & Demand is the Condo/Townhome Sector. Sales are down 21 percent compared with 2023, but inventory is double that of last year, yet prices, on a cost-per-square-foot basis, remain roughly the same as in 2023 and 2022. Surprisingly, pending sales are more than double those of last year. That sector has a long history of being eccentric.
The Vacant Land Sector, though, continues its pattern of being chronically depressed – never having fully recovered from the 2007-2008 market crash. In 2006, its Median Recorded Sales Price was $520,000. Currently, it’s $266,000. And, sales numbers have dropped significantly every year of the past four. On a positive note, however, there were 11 pending sales at the end of October compared to only 2 in 2023. Finally, from the long view, land is the only sector in which inventory is both low and actually dropping. Vacant land is not a renewable resource and eventually, it will become extremely scarce and expensive. So now, while it is such a bargain, is an opportune time to invest in it.
Stayed tuned for next month’s column when we give our prognostications for the year ahead in Sedona real estate.
