Sedona Market Update October 2019

It’s been a “Bull Market” for Sedona real estate since 2011. Is a Crash imminent? Unlikely, as long as the national economy stays on track. But, we are experiencing a plateau in the Single-Family Residence Sector. A different story, however, for luxury homes, condos, and vacant land.

A first glance, the current 8 percent drop in homes sales compared with 3rd Quarter 2018 is disconcerting until you step back for some perspective. 2018 was a record-breaking year – the best since 2005. Much of that, though, can be attributed to burgeoning vacation rental home sales. Those appear to be slowing as the short-term rental market approaches its saturation point. If we skip over 2018 and compare this year with the average number of homes sold between 2012 and 2017, we see a very impressive 17 percent increase in 2019.

$560,000

MRSP 3rd quarter od 2019

$349

Luxury homes average price per square foot

A Buyer’s Market

A good indicator of the general state of health of the Single-Family Residence market is the Absorption Rate. Essentially, it’s the average number of sales per month divided by the number of homes currently on the market. An AR of 20 percent or more points to a Sellers’ Market. A Buyers’ Market is indicated by a rate of 15 percent or less. By the 3rd Quarter 2019, the Sedona Area was averaging 41 sales a month and the inventory has jumped up to 218 Active (from 196) and 67 Pending listings. That gives us an AR of 14.4 percent or a 7 month’s supply of homes – a Buyers’ Market. So, it’s not too surprising that prices have leveled-off for now. In the past 5 years the Median Recorded Selling Price of homes has averaged a 6 percent increase every year. In 2019, however, there has been zero growth in the MRSP. We ended 3rd Quarter 2019 at $560,000 – the same figure with which we concluded 2018.

All-in-all, we have an extraordinarily diverse market right now with opportunities in every sector.

Remarkably, prices in the booming Luxury Home Sector have not appreciated much. Although sales numbers are about 12 percent ahead of 2018’s stellar performance, the current $349 Average $/Sq. Ft. is only up 2.3 percent over the average over the past 5 years ($341). The AR helps us understand why. With 5 home sales a month in 2019 and an inventory of 90 Active and Pending listings, we see a 17 month supply of residences over $1 million and an AR of 6 percent – indicating a sharp Buyers’ Market. Luxury homes are selling well, but the supply is more than keeping up.

On the other end of the spectrum, we find a 2 month’s supply of Townhomes and an AR of 50 percent – a gang-buster Sellers’ Market.

At the other extreme, with 300 Active and 26 Pending listings, Vacant Land is showing a startling 29 month’s supply and an AR of 3.5 percent. A tough market for sellers, but great for buyers.

All-in-all, we have an extraordinarily diverse market right now with opportunities in every sector.

About the Author

After a gratifying twenty-five year career in education, Roy turned his talents to real estate in 1997 and has been remarkably successful in helping his clients purchase and sell homes and land, happily, in the Sedona Area. A perennial top agent in Sedona and the Verde Valley, he’s earned such certifications as: Master Negotiation Expert, Harvard Program on Negotiation; International Property Specialist; Resort & Second Home Specialist; Master Certified Buyer’s Agent; Certified Luxury Home Marketing Specialist. 

Roy is an ex-college professor, school headmaster, past President of the Arizona Association of Independent Schools, and former-Marine captain. He initially committed himself to working solely with buyers, establishing his own real estate firm, Buyers’ Brokers of Sedona. For over fifteen years, Roy claimed the title of the number one Buyer’s Agent in the Sedona area. In 2014 he broadened the scope of his business to include listing and selling property.  Roy was the Sedona’s #1 overall agent in 2017 and in the Top 3 for the past five years. 

In 2019 Roy & Michelle welcomed two extraordinary real estate pros, Coco and Drew Clark, as business partners. Together they form a truly dynamic team that is destined to be one of the dominant forces in the Sedona market.

One of the early leaders in Sedona luxury real estate, Roy was a founding member and past President of the Sedona Luxury Real Estate Professionals and is recognized by Who’s Who in Luxury Real Estate.A native Arizonan who, in his characteristic contrarian fashion, grew up in New York, Roy moved to Sedona from Boulder, Colorado in 1991. He truly loves the aesthetic, cultural, and spiritual qualities of Sedona as well as its wild natural beauty. He and his faithful Pyrenean Mountain Dog, Sophia, and American Eskimo, Gracie, are often found hiking the extensive trails of the area and swimming in Oak Creek.  

A dedicated lover and patron of the arts, Roy is a past board member of The Arizona Opera, Chamber Music Sedona, and the Canyon Moon Theater. As a member and officer of the local chapter of the Chaine des Rotisseurs, an international food and wine society, he enjoys introducing his clients to the gastronomic delights found in Sedona.

 

Roy’s Certifications:

MCNE – Master Certified Negotiation Expert

CRS – Certified Residential Specialist

ABR – Accredited Buyer Representative

RSPS – Resort & Second Home Specialist

GRI – Graduate Real Estate Institute

CIPS – Certified International Property Specialist

CCSS – Certified Commercial Sales Specialist

CLHS – Certified Luxury Home Marketing Specialist


Roy’s Degrees: 

B.S. – Cornell University (History/Economics)

M.A. – Syracuse University (History)

Ph.D. – University of Colorado, Boulder (History & Philosophy of Education)


Roy’s community activities have included:

- Sedona Luxury Real Estate Professionals (Past-President) 

- The Sedona Mid-Day Rotary Club (Paul Harris Fellow)

- The Sedona Chapter of La Chaine des Rotisseurs (Charge de Mission)

- Sedona Arts Center (Sponsor)

- Sedona Cultural Park (Patron)

- Verde Valley Sinfonietta (Founding Corporate Underwriter)

- Chamber Music Society of Sedona (Advisory Council)

- Arizona Opera (Board of Trustees)