Sedona AZ (August 1, 2012) – The market in Phoenix has improved dramatically. The S&P/Case-Shiller Home Price Index for Phoenix for April 2012 was 109.01, a year-on-year increase of 8.62%. Part of this surge was the sale of a number of properties over $2,000,000, and, as those sales drop out over time, it is expected that average and median prices will ease up again. However, the market seems a lot healthier, with Real Estate Agents encountering multiple offers in a number of cases. According to the Kaufmann Index of Entrepreneurial Activity, Arizona is the number one state for start up businesses and Phoenix, as the capital, is attracting its fair share.
Up the hill, in cooler climes, Closed Sales for Sedona Residential Homes ONLY saw a drop back from the normal pattern with only 31 closings in June 2012. (See chart below). However, the total closings for the year 2012 numbered 225 against an average of 228 for the last eleven years. Maybe that suggests that people simply decided to make sure they got into the market at the beginning of this year rather than wait. With mortgage rates still extraordinarily low, and a number of “cash” buyers, the market has been fairly active.
The Absorption Rate continues to impress. The six month moving average stands at 7.5, where a number higher than 10 is a Buyers’ Market, and lower than 6 is a Sellers’ Market. We are nicely in that transition phase. (See chart below).
For homes below $600,000 the Absorption Rate is roughly 5 ¼ months, while for homes sold below $250,000 it is only 2 months. This is a vast improvement in the market since the 2007 and 2008 depression.
The best word I can find to describe the Sedona market is stable. Looking at Median Prices, based on a rolling six month data series, for the whole of Sedona, we have remained between $350,000 and $328,500 since October 2010. The table below shows the Median Prices for closed sales of Residential property only, in the whole of Sedona, but these numbers are taken on a quarter by quarter basis.
The average price per square foot for closed sales has improved over the last six months. For January 2012, the value was $165.89 per square foot, while in June it reached $189.44 per square foot. Despite this, we continue to see price reductions on a very regular basis, as Sellers attempt to get their home sold and move on with their lives. There continues to be a tendency to start hopefully above the market, and then reduce until you find a Buyer. This may not always be the best policy. Although there is the occasional increase in price, the average trend is to see about 14.6 price reductions every week.
Vacant Residential Land sales have also improved, and are averaging around 10.5 units a month now, up from 7.5 per month a year ago. Prices have remained stable at the lower level. To produce the chart below, I have taken the monthly total value of acreage sold and divide that by the total size of the acreage sold. I have then smoothed that over a six month period.
Finally, let us discuss distressed properties. These are properties either being sold by a Lender (REOs) or by people below water with their mortgage (Short Sales). In January 2012, there were 34 such properties listed for sale, and 11 closed escrow during that month. In June there were only 17 listed for sale, while 9 closed escrow. Distressed sales now account for less than 30%of the market, which is a vast improvement. Also, the percentage share of REOs, in those numbers, continues to decline as lenders find they do better to negotiate with their borrowers.
The latest LPS Mortgage Monitor presentation which covers data up to the end of May 2012, suggests is that, for Arizona, delinquency rates continue to decline at a faster annual rate than any other State. The percentage of first mortgages, that were delinquent in May by 30 or more days, but had not yet entered foreclosure, was 5.9% (down from 6.0% in April). The percentage of delinquent loans that are already in foreclosure declined from 3.0% to 2.9%. The overall non-current rate was 8.7%, down from 9.0% in April.
Arizona now ranks 36th in delinquent loans not in foreclosure, down from 34th and dropping below Utah and Wisconsin. Arizona now ranks 28th in pending foreclosures, down from 26th because we dropped below Idaho, Georgia and Iowa but were overtaken by Washington D.C. on its way down. Arizona ranks 35th in all non-current loans, down from 34th and dropping below Texas which moved up from 9.0% to 9.2%.
All statistics have been obtained from the Sedona Verde Valley Association of REALTORS® Multiple Listing Service, or as attributed in the text.
Sean Baguley is an Associate Broker with Russ Lyon Sotheby’s International Realty, 1370 Hwy 89A in Sedona, Arizona 86336. Call Sean at 928.399.4700 or email him firstname.lastname@example.org.
He brings a world of financial and executive skill to the table. Sean’s earlier career spanned over 30 years in the International Financial Markets, mainly in Bonds and Derivatives, based in London. He has dealt with institutional and corporate clients, structuring complex transactions. His well-honed negotiating skills make any move simplified and streamlined.
Sean’s background also enables him to see the bigger picture. Clients count on him to weigh long-term real estate goals and bring their dreams into reality. He is astute about the Sedona property market, having moved here from New York City in October 2001. He helps buyers and sellers make the most of the area whether they are investing in a retirement home, moving up, or searching for the perfect desert sanctuary. When buying or selling a home in Sedona, it’s essential to work with an agent whose depth of skill spans finance, business, management and marketing. Sean Baguley brings all this and a unique compassion for people and their needs to each and every client.