Winter Sedona Monthly Real Estate Column
Victoria Wylde writes the Sedona Monthly Real Estate Column in partnership with Roy E. Grimm, Phd. Victoria Wylde is the President Elect of the Sedona Real Estate Professionals group and works at Re/Max Sedona
For the ever-evolving real estate market, 2023 marked a pivotal period, weaving a tapestry of uncertainties, conflicting narratives, and guarded optimism. Bewildered by the media’s portrayal of both a housing “shortage” and an impending “crash,” prospective buyers and sellers alike are seeking clarity.
Eleven consecutive interest rate hikes by the Federal Reserve have forced buyers to reevaluate their goals. Although mortgage rates are not directly linked to the federal funds rate set by the Fed, continued rate hikes have indisputably diminished consumer confidence and home affordability. Lingering memories of the 2008 financial crisis have caused many potential buyers to adopt a cautious “wait and see” approach…
Sedona’s median home sale price has decreased about 10 percent year-over-year. However, Sedona real estate values surged by a massive 34 percent in 2021 and 27 percent in 2022. Home prices have simply softened because borrowing money is more expensive, yet low inventory and sustained, if tempered, demand persist. This is evidence that rate hikes have hit their mark. We just might be seeing the Fed’s “soft landing,” which would be excellent news for the housing market.
Altos Research and MBS Highway, two of the leading resources for real estate market insights, predict that the Fed will lower rates as early as Q1 2024, and almost certainly by the end of the year. Both institutions also forecast that when rates are lowered, buyer activity will surge, potentially causing significant appreciation— some forecasters are predicting a potential 10–15 percent year-over-year appreciation if mortgage rates drop to five percent. Anecdotal evidence also suggests that many prospective buyers, seeking refuge from harsh winter climates, are gearing up for spring home shopping in Sedona.
What does this mean if you are considering buying or selling a home in Sedona? The right time to buy or sell is when YOU are ready, not when the news media tells you it’s the right time.
For buyers, real estate is not about timing the market, but time in the market. In the long run, Sedona homes will undoubtedly appreciate. If you dream of living in Sedona, why delay making that dream a reality? Buyers also have a unique opportunity to negotiate favorable terms before the Fed begins to soften rates and home prices increase.
If life is taking you in a new direction and it’s time to sell your home, find gratitude in the unprecedented appreciation of your home, and engage a real estate professional to help you market your home and sell it for top dollar. Be patient while waiting for the right buyer—but also be fair and realistic about the value of your home. Our market has seen a rebalancing, which is beneficial to long-term market health, but gone are the days of multiple offers above asking price.
There is no guarantee of what 2024 will bring, but the signals from the Fed may indicate that rate hikes have had the desired effect, and are grounds for cautious optimism in the future of the housing market, both in Sedona and nationwide.
