Cooling Autumn, Roaring Spring?
By: Victoria Wylde, MSE
As seen in Sedona Monthly
It remains a question where the Sedona housing market is headed this fall as inventory continues to climb while prices remain steady. During COVID-19, the law of supply and demand was on full display: our market was starved for inventory, which, in conjunction with historically low interest rates, caused prices to shoot up. While we did see some tempering from the peak single-family home median recorded sales price (MRSP) of $1,100,000 in May 2022, prices have rebounded and the current 2024 MRSP is hovering just shy of the 2022 peak, at $1,080,000, which is up 8% from the 2023 MRSP of $999,000.
Concurrently, however, we are seeing massive amounts of new inventory being listed in a relatively tepid market. At the time of this writing in September 2024, there is a 66% increase in active listings for sale when compared to September 2023 (173 actives in 2024 compared to 104 actives in 2023). This is great news for buyers as they will have many more options to choose from and potentially a better negotiating position. By the same token, sellers have more competition and if the home is overpriced, it is likely to sit on the market for some time until the price is reduced. On that note, 47% of currently listed homes have had a price reduction.
Looking at townhome/condo sales paints a bit of a grimmer picture. There have been 57 townhome/condo sales in 2024, down 17% when compared to the 69 townhome/condo sales that occurred in 2023 during the same time period. Townhome/condo prices remain flat year over year with the median recorded sales price hovering at $560,000 with an average size of 1,426 sq ft.
Land sales are even bleaker in 2024 with 60 total closed land sales (down 9% from 2023) and a reduced median recorded sales price of $260,000 (down 9% from the $284,500 MRSP in 2023). The land market peaked in 2022 with a MRSP of $315,000. The declining land market is mainly due to rising construction costs that have affected not only Sedona but the entire country.
While we do not have a crystal ball (it would be handy in our profession!), our prediction is that we are going to have a sluggish fall market that could lead to a strong spring real estate market. In the trenches, we are seeing immense pent-up buyer demand with hesitation caused mainly by uncertainty around interest rates and the upcoming election. The Fed has indicated that they will decrease interest rates again this year (perhaps twice), which, in conjunction with having the election behind us, could jolt home buyers’ appetite and create a roaring market in the spring of 2025.
