Sedona and Verde Valley Real Estate
Third Quarter 2016
Solid gains in the median sales price highlights the single family market in Sedona and other areas of the Verde Valley for the last 12 month period. The median sales price in Sedona rose 6.4% in the last 12 month period over the previous 12 month period to $465,000. This is the highest median sales price in Sedona since 2007-08. Since the bottom of the market, in the Sedona area, the median sales price has risen 40%, averaging 8% per year.
Other areas of the Verde Valley have seen solid gains in the median sales price in the first nine months of 2016 compared to the first nine months of 2015 with Rimrock/Lake Montezuma coming in at an 11% increase, Cottonwood at a 10% increase, followed by Camp Verde at 9.5%. These are tremendous gains with the only question being is how long price increases like these can be sustained.
Upward pressure on pricing is being fueled by low inventory, especially in the price point below $500,000 and near record low interest rates. In the price ranges below $500,000 at this writing, there is less than a 5 month inventory of homes available based on sales year to date, and as low as three months, for property in the $200,000 to $300,000 range.
According to Tom Brandvold of Oak Creek Mortgage, a 30 year conventional loan, on a single family home with 80% loan to value and a borrower with good credit, interest rates are in the 3.375% to 3.5% range with no points or origination fee. He expects that these will be the lowest rates for the rest of the year, but it being an election year it is really anyone’s guess. What we do know however, is that these are great rates!
The luxury home market has significantly slowed down over the last 12 month period with 19 sales compared to the previous 12 month period of 29 sales, a 34% drop. Along with the drop in transactions we are seeing a drop in inventory with 56 properties on the market above $1,000,000 compared to 71 at the beginning of July. With extraordinary long time on the market, some sellers are taking their homes off the market with a wait and see attitude.
Sedona area vacant land sales are still very soft with 115 in the last 12 months and prices dropping 13.4% to a median sales price of $130,000. Soft pricing is compounded by a 3.5 year supply of lots on the market.
Just the Facts: Please note many of the graphs in the following pages are from the 12 month period from October 1 to September 30 and compare the year over year prices and sales.
The median price of a single family home saw a nice increase of 6.4% in the last 12 month period compared to the previous 12 month period coming in at $465,000. The number of transactions for the last 12 months was up 4% compared to the previous 12 month period with 413 sales, marking 7 years of sales with numbers ranging from 389 to 415 sales per year. Steady as she goes for single family transactions.
Vacant land transactions are stagnant with 115 sales in the last 12 months. We have not seen a real gain in vacant land prices since the bottom of the market in 2010-11. 2016 year to date sales are at 97 which might indicated that we could finish the year with sales in the 130 range and see some increase in pricing. There is still a significant amount of oversupply.
As stated above the luxury market, over $1,000,000, has not performed as well in the last 12 months as it had in the previous three years. Year to date 2016 there have been 15 sales over $1,000,000, with one sale over $2,000,000 and one sale over $2,500,000.
Agent days on the market saw a significant drop to 106 days for the last 12 months, down from 125 for the previous 12 month period. This lowering of the time on the market reflects the lack of inventory in the lower price ranges and the increase in prices. Supply and demand at work in Verde Valley real estate.
The median sales price for Condos and Townhomes in the Sedona area dropped off 11% to $240,800 in the last 12 months. The number of sales was off just a bit to 92 sales in the last 12 month period.
The median sales price for single family homes in the Camp Verde area for the last 12 months is up 3.4% for the last 12 months to $190,000 from $183,750 for the previous 12 months. Notably the median sales price for the first 9 months of 2016 is at $205,950 up 9.5% from the first 12 months of 2015.
Lake Montezuma and Rimrock:
The median sales price for single family homes in the Rimrock and Lake Montezuma took a dramatic jump in the last 12 months with a 15.4% increase over the previous 12 months to $164,000. In spite of the jump in median sales price the number of sales was down almost 20% to 58 sales in the last 12 months. The median sales price in Lake Montezuma and Rimrock has more than double since the bottom of the market.
Cottonwood and Cornville:
The median sales price for single family homes in the Cottonwood and Cornville area rose 9.6% to $219,000 for the last 12 months up from $200,000. This is the highest median sales price in this area in the last 8 years. Numbers of sales were steady at 499 sales, the highest number of sales for any area in the Verde Valley.
The Bottom Line: Solid gains in pricing occurred in all area of the Verde Valley on the strength of limited inventory and phenomenal interest rates. Inventory of lower priced homes in all areas continues to evaporate and the bottom tier price range continues to rise. Our feeder markets of the upper Midwest and California are continuing to send buyers to the Verde Valley and with our desirable fall weather we can expect to see them for the rest of the fall selling season. It is anybody’s guess what will happen after the election but with the country pretty much divided between Hillary and Donald, half of us will be happy and half disappointed, so my guess not much will change after the election, hopefully…..
For the complete Third Quarter Sedona and Verde Valley report : https://old.randycrewse.com/wp-content/uploads/2016/10/Market-Statistics-October-to-September-2004-to-2016-with-observations.pdf