Roy E. Grimm
“Buy Land. God ain’t making any more of the stuff.” Will Rogers
As the overall Sedona Real Market continues its steady recovery, the Vacant Residential Land Sector is the one spot in which amazing bargains go begging – for the time being.
Will Rogers is, after all, quite right – especially in regards to Sedona. We’re an island of private property surrounded by the Coconino National Forest. Pretty much every significant piece of Sedona area land that can be brought into the market already has been – although the failed, hundred acre, Bella Terra project has yet to return. It’s estimated that land is roughly 75% built out. So, we do have plenty of in-filling ahead of us. But, the closer we get to that full build-out level, the more scarce vacant land becomes. Private land here is a non-renewable resource. And, as the supply dwindles, expect prices of both land and homes to skyrocket.
To quote the Preamble to the National Association of Realtors Code of Ethics, “Under all is the land.”
The prospect of an imminent lack of supply was the driving force behind the mini-land rush we experienced back in 2003-2005 when three or four hundred lots were being sold each year. The 105 sales in 2015 – down from 129 in 2014 – are indicative of the current softness in that market. Meanwhile, though, more and more homes continue to be built, in truth, inexorably diminishing the supply of vacant land.
Prices, too, are still far off the $300,000 to $500,000 Median Recorded Selling Prices we saw in the years from 2005 to 2008, peaking in 2006 at $519,000. In 2015, that MRSP was $139,000 – down 10% from 2014!
So, we now have a temporary slump in the Sedona Land Market. What better time to buy?
My prediction, predicated, as ever, on reasonable economic stability, is that we’ll see a dramatic rally in land values before the end of this decade. Eventually we’ll be back to those stratospheric prices as the inventory runs out.