After two years of sluggishness, Sedona real estate is showing some signs of vitality, just in time for the fall high season. Sedona Single-family residence sales are up 5% over mid-September 2023. I expect that to pick up as we get deeper into the fall selling season. Better financing options and more inventory for buyers to choose from should stimulate additional demand.
The Fed is finally dropping interest rates, mortgage rates are headed down as well, gradually, and housing supply is expanding dramatically – up locally 25% since August and 66% over September 2023. It’s now 80% of what it averaged between 2015 and 2019, and that gives buyers considerably more choice and applies stiff competitive pressure on sellers to moderate home prices.
Nationally, the Median Recorded Sales Price is up 4.2 percent in 2024. And, the Realtor.com economics team expects 4.6 percent by the end of the year. In Sedona, however, it has already risen 10% this year. Expect that to level out as supply rises to meet demand. That exceptional figure does require a caveat, though, especially when we note that 47% of the homes on the market have had price reductions. The median, the midpoint in a range of prices, does reflect actual changes in property values, but it also is affected by the mix of what is selling. Lately we’ve seen lighter sales of lower priced homes and more for luxury residences – perhaps because we have more cash buyers at the high-end who are not fazed by interest rates. That said, prices have remained resilient. They may soften somewhat, but they’re likely to continue increasing.
In any case, we are seeing buyers increasingly return to the Sedona market. Although home sales are 15 percent lower than their average between 2015 and 2019, they are up, as mentioned, about 5% over 2023 – at a time when national existing home sales are down 2.5%.
36%
Increase in Residential pending home sales
25%
Increase in Sedona housing supply since August
The good news for sellers? Residential pending sales (homes under-purchase contract) are up 36 percent over last year. That bodes well for future closed sales.
Speaking of the sales process, here’s a quick update on what’s happening in the trenches since the new NAR Settlement rules finally went into place across the nation on August 17th (August 7th, locally):
The new, much longer, employment agreement between sellers and their listing agents does lay out the compensation to the listing brokerage as well what, if anything, sellers are offering to the buyers’ brokerage. It appears that the vast majority of sellers are still willing to incentivize buyer brokers. While that compensation must not appear anywhere in the MLS listing, listing brokers are free, currently, to publicize it elsewhere. Some brokers will publicly offer zero compensation even though their sellers are actually open to negotiating the number when asked.
Buyers’ agents are now required to a have signed Exclusive Buyer’s Broker Agreement with buyers before taking them out to see property, including the compensation that may be due to the brokerage. When presenting an offer, the buyer’s agent typically includes the Seller’s Compensation Agreement specifying what that agent is expecting at close of escrow. Like the purchase contract, the SCA is negotiable. The whole process has been made more complicated, but for the time being it is, in essence, similar to what has been done for years.