Sedona and Verde Valley Real Estate Third Quarter 2015
The third quarter of 2015 once again brought into focus just how steady our market has been in terms of the number of transactions. For single family homes for the sixth year in a row for the October 1 to September 30 time frame year over year, the number of transaction comes in right in at 400 sales per year. From the venerable team of Hans and Franz “Hear me now and believe me later”, I feel it is safe to say that when we see a significant variation either up or down from this number, that change will be afoot. I just have to say that to me, it is rather remarkable that the market is so steady in terms of the number of single family sales.
So with the steady numberof transactions what else has been going on in the market? We saw residential inventory for both Sedona and the Verde Valley peak in 2008 and early 2009, and then level off to steady as she goes for the last three years. With the current levels of residential inventory we have about 40% less residential inventory than we had at the darkest days of the recession. Since January of 2012 we have seen residential inventory dip into the 360 units in January of each year then rebound up into the 415 unit range for the rest of the year. It will be interesting to see if that occurs in January of 2016
While the numbers of sales and inventory has remained steady, median sales prices have been steadily rising. Over the last 12 month period the median sales price for single family homes in the Sedona area rose 4.4% from $418,500 a year ago to $437,000. Since the bottom of the market 4 years ago the median sales price has risen from $333,000 to $437,000, a 31% increase, averaging just under 8% per year, not too shabby. No bubble here in my opinion, but keep your eye out for abnormalities!
The Rimrock/Lake Montezuma area was hardest hit area in the Verde Valley during the most recent recession, which by the way is like 6 years ago now. It does seem like yesterday to me, I think because it was so traumatic for us baby boomers, I am digressing here. In many ways it is the least desirable are in the Verde Valley due to its lack of services. In spite of that, real estate prices in that area boomed between 2000 and 2007 when they peaked. In the 4 year period from 2000 to 2004 the price of vacant lots went from $10,000 to $40,000. I do not even need my calculator see that is a cool 400%
Single family homes for the Rimrock/Lake Montezuma area peaked in the 2005, 2006 time frame and proceeded to go into free fall, dropping all the way down to $79,000 at the bottom of the market. That was a 64% drop in the median sales price of a single family home, OUCH.
For those who were brave enough to venture into shark infested waters, there has been real opportunity in that area. With the median sales price in the Rimrock /Lake Montezuma area at $142,000 for the last 12 month period, that is a satisfying 80% increase in the median sales price, that is hard to top in any game of investing. I love hindsight, but long for foresight.
Just the Facts: Please note the following statistics are for the 12 month period 10/1/14 to 9/30/15 and are compared to the previous 12 month period 10/1/13 to 9/30/14.
Sedona area: The median price of a single family home rose 4.4% over the previous 12 month period. The number of transactions in the last 12 month period remained steady at 396 transactions.
Vacant land transactions for the last 12 month period came in at 113 transactions down 19% from the previous 12 months of 138 transactions. Vacant land prices remained steady in spite of the reduction in transactions at $150,000. After having seen an upsurge in the vacant land segment of the market there has been a lull in the last 12 months. There is still a multiple year supply of inventory and the pent up demand of owners wanting to sell their vacant lots.
The luxury market, over $1,000,000, has seen 29 sales in the last 12 months. Like other segments of the market is steady. Inventory of homes priced over $1,000,000 has hovered around 70 units for years.
Cumulative days on the market saw a 5.5% decrease in the last 12 month period reducing to 125 days. This reflects a steady supply and demand in the market place.
The median sales price for Condos and Townhomes in the Sedona area rose to $279,950 over the last 12 month period up from $228,700 for the previous 12 month period, a 22.4% increase.
The median sales price for single family homes in the Camp Verde area rose 11% in the last 12 month period over the previous 12 month period to $183,750. The number of transactions is slightly up to 88 transactions over the last 12 months compared to 78 from the previous 12 month period.
Lake Montezuma and Rimrock:
The median sales price for single family homes in the Rimrock and Lake Montezuma area rose to $142,000 up just over 15% over the previous 12 month period. That is an 80% increase over the 2010-11 time periods. Pretty phenomenal! Number of transactions for the last 12 months was down to 71 sales in the last 12 months compared to 77 for the previous 12 months.
Cottonwood and Cornville:
The median sales price for single family homes in the Cottonwood and Cornville area rose to $200,000 for the last 12 months, up just over 3.4% over the previous 12 month period. The number of transactions was up strongly at 495 transactions for the last 12 months up 12.5% from the previous 12 month period.
The Bottom Line: Prices are continuing to rise in all segments of the market. Inventory below $500,000 in the Sedona market is tight and almost non existent below $300,000. Interest rates are great although we will all be walking carefully as we work are way through the new TRID changes brought on by Dodd Frank. Buyers still want to warm up and dry out and the Southwest is the place to go from Chicago West. We will see more of same for the Fall selling Season!