Sexy? No. Healthy? Yes.
For those of us who rode the wild mare of a market up the 2005-2006 mountain in crazy price leaps and bounds and then off the precipice, market stability is a welcome state of being. Sure, we home-owners would love to regain the equity we once had in the high times. And, we will, eventually. But, a sure and steady pace is critical to market sustainability. As is excising the malignancy that undermines strong market health: foreclosures (REO’s) and short-sales.
Having sufficiently mixed my metaphors, I am happy to report that the Sedona real estate market is making headway on all fronts.
Comparing 3rd Quarter 2013 figures with this year’s, the prognosis is good. The number of Single Family Residence sales is down 5% from last year. But, at the end of August we were off 10%. So, we are seeing something of the fall season rally that we had hoped for.
5%
Percent of sales, REO or shortsale
$424,000
Median Sedona recorded sales price
Distressed property segment has become more of a footnote
With sales down one might expect that prices would follow suit. Au contraire, the Median Recorded Sales Price for those homes (about $424,000) is up 5% over 3rd Quarter 2103, as is the Average Price per Square Foot (about $214). By far, that’s the strongest showing we’ve seen since 2008, but considerably off the peak figures in 2006 of $600,000 and $313 per square foot.
The best news for sellers, though, is that the distressed property segment has become more of a footnote than a market presence. At this point last year, 16% of the Solds were either REO’s or short-sales. So far, this year it’s been steady at 5%. Among the active listings there are merely two REO’s and one short-sale; 1% of the total listings.
The Luxury Home sector is seeing a nice rally. It’s neck and neck with last year’s remarkable showing. Sales over $1 million in both 2013 and 2014 are the best since 2007. The good news for buyers, though, is that the average Price per Square Foot for these homes is off last year’s by roughly 10%. Even that, however, is beginning to rise.
The best news for sellers, though, is that the distressed property segment has become more of a footnote than a market presence. At this point last year, 16% of the Solds were either REO’s or short-sales. So far, this year it’s been steady at 5%. Among the active listings there are merely two REO’s and one short-sale; 1% of the total listings.
After a remarkable flurry of activity and rising prices in the first third of this year, Vacant Land sales have settled down. The number of lots sold is still about 12% ahead of the 2013 returns. Prices, though, are not much above 2103’s $150,000 Median Recorded Sales Price. Distressed properties accounted for roughly 6% of the sales, but have virtually disappeared from the active inventory recently. As we saw in the residential sector, they comprise only 1% of the listings. That’s a game changer for future sales. Expect prices to resume a steady, long-term climb.
That can be said for Sedona real estate in general. Baring future economic catastrophes, the Law of Supply and Demand does, indeed dictate significant value appreciation across the board in the Sedona area. Surrounded as we are National Forest saleable vacant land is an ever-diminishing, non-renewable resource. Prices have to go up as the supply goes down.