A tough year and a half in the rearview mirror and optimistic road signs for 2024.
Total 2023 sales of single-family residences came in at 365 – down 16% from 2022 and the lowest number since 2009.The Median Recorded Selling Price of those homes finished the year at $985,000 – 6% lower than in 2022.
2022 saw a record year for sales and prices – in the first half. But that ended with a fizzle in the fall. There were only 9 pending sales going into January 2023 – the Pre-Pandemic average is about 54 for that time of year – and the rest of the winter didn’t see much improvement. The 1st Quarter racked up only 73 sales with a MRSP of $930,943. Spring 2023 saw significant strength in April and May and a MRSP of $999,000 for the first half of the year. Instead of gathering momentum by fall, however, that rally once again petered-out and the MRSP slipped to $977,500 for the second half of 2023. That was an excellent time to be a home buyer..
16%
Decrease in sales 2022 vs 2023
$985,000
MRSP for 2023 Single Family Homes
Townhome/Condo sales, for once, mimicked single-family home sales with similar declines in sales numbers and MRSP.
Vacant Land, however, saw a 39% drop in sales numbers and a 12% decline in the MRSP.
So, all in all, the past year and a half was, indeed, a propitious time to be a buyer regardless of the market sector. And, it still is. For the moment. Frankly, it will be a long time before we see a Sedona real estate market as slow and soft as this one has been.
That’s changing. Early January 2024 Pending Sales were more than double those of last year – though still way off Pre-Pandemic levels. But, they do indicate some strength going into the New Year. Even this January, our slowest month, we’re seeing far more activity than normal for the winter season. The word from agents in the trenches is that they’re seeing a significant change in buyer attitudes. More confidence in the economy and a sense that the real estate market has bottomed out and prices are bound to go up – so it’s finally time to buy what they want and get on with their lives.
Once we hit spring, expect a market surge as mortgage rates ease, consumer confidence continues to gain strength, and the dam breaks that has been holding back pent-up demand for the past year and a half. That 20% to 25% of the buyer pool who have held off purchasing property because they’ve believed, firmly, that the real estate market was bound to crash, will finally have to release that notion as prices gain momentum. Further delays in purchasing will simply cost prospective buyers more money.
Well-respected market analysts like Dr. Lawrence Yun, Chief Economist for the National Association of Realtors and Mike Simonsen, CEO of Altos Research reflect what appears to be a growing consensus among the national experts. Predicated on gradually declining mortgage rates ahead for the next year or two, they predict a soft 1st Quarter real estate market followed by a surge in the 2nd Quarter and increasing momentum for the rest of the year and well into 2025.
Some buyers may think it sensible to hold off purchasing until mortgage rates decline substantially, but the reality is that as rates go down prices are likely to go up faster. Many will have the epiphany that it’s more sensible to buy or sell a property when it suits the needs of the family rather than trying to game the market.