Sedona Land Market
Renaissance of the Vacant Land Market
The news from the long-suffering Vacant Land Sector has been grim, if you’ll pardon the expression, since the market crash over a decade ago – up until this past year.
Back in 2006, the Median Recorded Selling Price of vacant lots was $519,000. In 2011, it was $108,000., By the end of the 1st Quarter 2020, the MRSP had worked it’s way up to $176,000, but was still being vastly outpaced by the housing market recovery.
Ironically, however, the Year of Covid has brought new life to land. With the inventory of homes at absurd, unheard-of low levels, many buyers are switching to buying land and building what they really want.
Even for buyers who aren’t ready to build yet, there is a growing realization that, plentiful as it may seem now, vacant land in Sedona is a non-renewable resource. Bounded as we are by National Forest, the supply will inevitably diminish to a point at which prices will spike dramatically. As that dawns on more prospective buyers, the land market come-back will gain momentum.
That comeback is well underway and gaining strength in dramatic fashion. At the end of the 1st Quarter 2020, 31 lots had sold. In 2021, that’s nearly tripled to 91. The MRSP has risen 26% to $222,500. That’s still a far cry from 2006’s $519,000, but the land market is in its take-off phase. Inventory has dropped 60% from 275 parcels in 2020 to 109 in April 2021! Conversely, demand continues to spike. At 1st Quarter 2020, there were 9 parcels pending sale – that is, under contract for purchase. In 1st Quarter 2021 we have 84, nearly ten times as many!
The Law of Supply and Demand is about to demonstrate its power. The Median List Price of those Pending Sales is already up to $375,000. Those 2006 prices may be back faster than we thought.
As Will Rogers is supposed to have said (having stolen the line from Mark Twain), “Buy land, God ain’t making any more of the stuff.”