First Quarter 2016 Sedona and Verde Valley Real Estate Statistics
Inventory is the name of the game going forward for Sedona and Verde Valley real estate in 2016. Going into the second quarter of 2016, the Sedona area has 20% less residential inventory on the market than at this time in 2015 with 337 residential units on the market. Residential inventory in the entire Verde Valley is off 17% from this same time last year too. We have seen this shortage now for the last 6 months. This shortage of inventory has produced an acute shortage of inventory in price ranges below $500,000.
So what is causing this shortage of inventory? To be honest with you I do not know, but I can speculate. The first thing that comes to my mind is that sales are way up.Not so. Are they up a little bit, yes, Sedona area single family home sales are up 7% in the last 12 months from the same period a year ago to 413 single family homes sold. But we have been in the 400 range for single family homes for the last 7 years now.
One thought is that sellers are not aware of how strong the market is and if they did they would be putting their home on the market in droves. I do not think this is true either, pretty much everyone that I talk to know that values have rebounded significantly and this is a good time to sell.
In many areas of the country where there is significantly more privately held ground, when housing shortages occur builders start building homes. We do not have the large tracts of land in the Sedona area to warrant builders to come in and develop a housing project. At this point we see a few “spec” builders building a few homes, a drop in the bucket as far as impacting inventory is concerned.
One theory is that there still is an underlying lack of confidence and just plain paranoia with buyers and sellers. After all we just got through the worst economic downturn in most of the populations recent memory and we have not gotten over it. There are still a significant number of sellers that are upside down on their mortgages and can’t sell even if they want to. So many folks were impacted by the downturn. The recovery has been lukewarm, with lots of jobs being created but for the most part they do not pay as well as the ones that were lost, so buying power for many has been diminished. Congress is divided, and the name calling in this election cycle is at levels we have not seen in our lifetime. So we just stay put because it is safe.
Another idea is that folks are just not moving as much as they used to. Since its peak in the late 60’s when right at 20% of households moved in a year, there has been a steady drop in mobility to around 11% in 2015. If you don’t move, you do not need to sell a home. I think that helps explain part of the reason that we have seen the number of sales remains steady; we just do not have the number of folks that are now “free to move about the country”. For current residents the median age in the Verde Valley continues to grow and the need to move lessens, they are good to stay right where they are. Besides why would anyone want to leave the Verde Valley?
These are a few of my ideas why inventory is at these low levels, and it is probably a combination of all of them. So….. I think we will continue to see inventory in the Verde Valley and Sedona especially stay low for the rest of 2016.
Just the Facts: Please note many of the graphs in the following pages are from the 12 month period from April 1 to March 31 and compare the year over year prices and sales.
Sedona area: The median price of a single family home rose just under 3% in the last 12 month period compared to the previous 12 month period. The number of transactions for the last 12 months rose 7% compared to the previous 12 month period. Not too significant, when looking at the last 7 years of transactions in that 400 range.
Vacant land transactions are very soft with a 25% drop in the number of sales in the last 12 month period. In addition to the drop in number of sales the median sales price dropped 9% compared to a year ago. Vacant land inventory has remained steady at around 350 lots for sale which is about a three years supply at this time. Good view lots are hard to find and will bring a premium. Low residential inventory is not having an impact land sales yet.
The luxury market, over $1,000,000, softened in the fall of 2015 and remains soft with four sales over $1,000,000 in the first quarter of 2016. There were 23 sales over $1,000,000 in the last 12 month period, a 35% drop from the previous 12 months. Inventory of homes listed over $1,000,000 remains steady at around 65 listings.
Cumulative days on the market saw a significant drop to 121 days for the last 12 months. Properties that are priced right are selling quickly.
The median sales price for Condos and Townhomes in the Sedona area rose to $270,000 for 2015 but we are seeing a softening of prices for the last 12 month period to $240,000. Number of sales slowed down to 90 in the last 12 month period, about a 10% decrease.
The median sales price for single family homes in the Camp Verde area for the last 12 months is up 7.4% for the last 12 months to $188,000 from $175,000 for the previous 12 months. The price increase was driven by a sharp increase in the number of sales up 24% to 101 sales for the last year. Keep an eye on this market, the median sales price for sales in the first quarter was $212,000, the highest first quarter prices since 2005.
Lake Montezuma and Rimrock:
The median sales price for single family homes in the Rimrock and Lake Montezuma saw the largest increase in the Verve Valley in the last 12 months with a 14% increase over the previous 12 months to $150,000. That brings the increase in the median sales price since the bottom of the market in 2011-12 to 83%. Talk about opportunity! Number of sales rose slightly to 72 sales. Affordability is the word for the Rimrock – Lake Montezuma area.
Cottonwood and Cornville:
The median sales price for single family homes in the Cottonwood and Cornville area rose 7.6% to $210,000 for the last 12 months up from $195,000. Number of sales rose 4% to 497 sales for the last 12 month period.
The Bottom Line: Inventory is tight all over the Verde Valley. The low end of the market is vanishing in the Sedona area, making prices in the rest of the Verde Valley look attractive and the buyers got it figured out. Interest rates are still great, they need to be. Well priced homes are selling quickly. Foreclosures are almost nonexistent. It will be a good time to sell a home in the Verde Valley for the rest of 2016.
Click here for the complete: First Quarter 2016 Sedona and Verde Valley Real Estate Statistics