IF
REAL ESTATE SALES ARE SO SLUGGISH, WHY ARE SEDONA PRICES STILL
LEVITATING?
Yes,
the market has slowed, and that’s a good thing. In fact,
it’s probably healthy. But what nationally has become a
distinct buyer’s market has quite a different look here
in Sedona. If you study the trends of the last 20 years, you will
discover that although there have been occasional dips in the
number of transactions in a given year, the average selling price
of those transactions nevertheless continued to climb upward.
As
2006 draws to an end, it appears this year will be no exception.
From
January 1 to November 30, the number of residential units sold
declined by 35% compared to the same period in 2005. On the other
hand, the average selling price per unit increased by 18% and
the average median price increased by 10%.
As
for vacant land transactions, the number of parcels sold declined
by 63% (yes, you read that right), while the average selling price
per parcel increased by 37% and the median selling price increased
by 40%.
What
are these numbers telling us? Namely that the Sedona real estate
market remains uniquely stable despite the impact of national
trends, and that it is becoming an increasingly expensive place
to buy homes and vacant land. Smart buyers are recognizing the
advantages of purchasing now and are not waiting. As prices continue
their climb, hesitant buyers will eventually wish they had acted
sooner.
Consider
these advantages to a purchase in today’s cooler climate
(no pun intended):
- Buyers
have the ability to negotiate with the seller instead of with
competing buyers.
- Buyers
can select from a larger inventory of properties that meet their
criteria.
- Interest
rates are lower than they have traditionally been over the last
twenty years.
- Sellers
are more willing to provide incentives and flexibility in their
sales terms.
“Property-flipping”
investors, who hope to turn a quick profit, have for the most
part come and gone. But if you’re in it for the long haul
– that is, buying a home with the intention of living in
it for three to five years – a home is still an excellent
investment.
Is
property here going to become more affordable in the future given
our temperate weather, stunning natural beauty, limited supply,
and other lures that capture the hearts of millions of visitors?
Not very likely. Despite the fact that the number of real estate
transactions in Sedona and the Verde Valley will fall this year,
prices will almost certainly end up rising by more than 10%. Does
that mean this is a time for speculation? Definitely not, but
it is a time for opportunity.
To
all my friends and acquaintances, I hope each of you has a joyful
Holiday Season followed by a Happy and Healthy and Prosperous
2007. See you next year!
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