Beginning in 2008 foreclosures and short sales started to have a major impact on the Sedona real estate market. Due to the significant numbers of distressed and short sale properties coming on to the market in late 2008, the Sedona Verde Multiple listing service created categories and search criteria for foreclosures and short sales. This enabled realtors to sort for these two criteria.
In looking at 2009, the first full year that these statistics were available, 141 of the 344, 41%, of the single family sales were either foreclosed or short sales. In 2010 of the 404 single family sales, 173, 43%, were either foreclosed or short sales. In 2011 of the 387 single family sales 143, 37% were foreclosed or short sales, a 6% drop over the previous two years. Year to date 2012 shows that 25.4% of the 102 sales were foreclosed or short sales, another 11% drop. All of us both Realtors and buyers and sellers are hoping that this trend will continue.
Ok, so we have foreclosed and short sale properties on the market. Why do we abhor them so? Bottom Line: the Banks that own foreclosed homes, and the sellers selling short sales, lower the price of these homes until they sell. Since we have not had enough buyers to buy the homes on the market, that is what got us in trouble in the first place, the price gets lowered until they sell. Consequently the median sales price for the foreclosed and short sale inventory ends up being significantly lower than median price for “regular homes” In 2009 and 2010 the median sales price for foreclosed inventory was 29% lower than the “regular Sellesr” and in 2011 and 2012 it is 37% lower than “regular sellers”. Now you can see why foreclosed inventory drives prices down. It is not a pretty picture, unless you are a buyer.
Bottom Line:Until we work our way through the foreclosed and short sale inventory, or we have a significantly lower number of them to deal with they will continue to have a dampening impact on the market. We do have a lower amount of inventory on the market right now and buyer interest is strong so maybe some of their impact will be softened during the balance of 2012.