Market Forecast for 2017

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With a surprising late surge, 2016 turned out to be the most prolific year for the Sedona Single Family Residence sales since 2005 (424 – up 4 percent from 2015) and the strongest for prices since 2008. The Median Recording Selling Price was up 10 percent to $479,500 and the Average Price Per Square Foot was up 6% to $230.

Has that year-end momentum continued into 2017?  Yes.

Will it gather more steam as the year progresses?  I think it will – providing that the present administration doesn’t upset the economy with trade wars or disruptive international policies.

So far this year, we’re seeing more activity – in closed sales and, particularly, in pending sales – and sharp price appreciation. By late February we had, roughly, an 11 percent increase –  to over $500,000 – in the Median Recorded Selling Price compared with last year at this time and a 6 percent uptick in the Average Price Per Square Foot.

Some of that has to with a remarkably and newly robust Luxury Home Market pulling up the numbers. At the end of February, we had six sales of residences priced at above $1,000,000 and five were pending sale. That’s our best start since 2007 – the luxury home market peak.  So, we’re on track to match or exceed the two strongest years since then: 2013 and 2014.

The most shocking development that jumps off the current stats sheet, however, is the abysmally low level of housing inventory, from condos to million dollar homes. Last year, at this time, I reported that we were down to 255 Single Family Residences on the market.  Back in booming February 2005, there were 244. In late February of this year there were only 197.

That’s likely to result in continued rising prices – as the Law of Supply and Demand kicks in.  Buyer interest in Sedona and their ability to purchase appears to be on the upswing. Rising prices and fewer choices, though, could slow home sales as buyers are tempted to search elsewhere.  We’re already seeing that they are looking to vacant land as an alternative and sales in that sector are picking up at a wide range of price points. It’s likely that we’ll see something of a mini-land rush with prices finally appreciating markedly.

All-in-all, I expect 2017 to be a banner year for Sedona Real Estate across the board. The National Association of Realtors is projecting about a 4 percent increase in home prices. I’ll be surprised if we don’t double that locally. So, buyers would well-advised to get off the fence before rising prices and interest rates add significantly to the cost of the home purchase. On the other hand, home sellers should have more motivation to get their properties on the market and take advantage of the lack of inventory and competition.

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