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Sedona 2013 Quarterly Real Estate Update

Eye on Sedona Real Estate columnist, Sean Baguely

Eye on Sedona Real Estate columnist, Sean Baguely

Sedona AZ (May 15, 2013) – I wish to begin with an apology. My hard drive has been failing, making my computer incredibly slow. I purchased a replacement hard drive, but the cloning process created corruption in a number of ‘Sectors’. Rebuilding everything has taken a lot of time and expertise (not mine).

Also, the Sedona Association changed MLS providers. This has made life a little more of a challenge, as the new program allows you to select from a lot more variables; if you have the “wrong” box checked, your search will contain a load of rubbish. As they say, “Garbage in; Garbage out!” Please do not take this as a criticism, as the provider’s support team, and the Association personnel, have been absolutely wonderful and have provided a great deal of help and education. The blame lies entirely with your humble scribe, and, although I have spent a considerable amount of time cross-checking data in an attempt to achieve accuracy, this edition is definitely E&OE.

The Sedona market has maintained its improved tone. The table below shows the quarterly median values for Closed Residential Home Sales in Sedona.

Sean 1000

I include activity for Residential Homes only. I do not look at Condominiums or other dwellings, although I do keep track of them.

The improvement in the market is also reflected in the average price per square foot. Median values are less influenced by odd data, and spreading the series over a rolling six months adds to the perspective. Looking at this series for the average price per square foot, and after a spike in the period ending February 2013, the number for March 2012 was $178.04 per square foot, while the number for March 2013 was $204.94 per square foot, an approximate 15% improvement. The chart below reflects this improvement, and is plotted against the January 2000 number adjusted by the increase in the Consumer Price Index.

Sean 1002

There has been some discussion in the press with regard to the possibility of a either a “double dip” in home prices, or alternatively a new “bubble”. Although the economy remains embarrassingly weak, and the number of people in the workforce continues to decline, I cannot bring myself to conclude we are on the brink of a new recession. However, with investment returns so low, as are mortgage rates, I do see the need for a vehicle to invest for the longer term. I would not go so far as to declare a “housing shortage”, but definitely the market has improved, and we have seen a number of “cash” purchases, as well.

Vacant land sales continue at a slowish pace, with only five closed sales in March 2013, on a total of 5.45 acres, with a total value of $607,300. This may reflect a continuing difficulty with obtaining financing. The average price per acre is still hovering just below $200,000. Please also remember that prices for vacant residential land lie along a curve. You may not take the value of a closed sale for a quarter acre parcel, and multiply by four to arrive at the value of an acre.

If you take the total value of the residential acreage sold per month, and divide that by the total acreage, we arrive at a price per acre. The chart below shows this series. Again, a very stable market.

Sean 1003

As discussed last time, there has been a gradual loss of inventory as 2012 came to a close, with the number of active listings on January 1st, 2013 standing at 224. Although there were 90 closed sales in the first quarter of 2013, compared with 103 for the same period in 2012, the inventory as of March 1st 2013 was 254. However, if you take the average number of listings for the first quarter 2012, against the first quarter 2013, the numbers are 283 versus 236, respectively, a fall of just over 19%.

The Absorption Rate remains in the “Transition” area between a “Buyer’s Market” and a “Seller’s Market”. (See chart below). If you split the market into three bands, $0 to $600,000; $600,000 to $1,250,000; and over $1,250,000, the average number of months properties have taken to sell is 5.0 months; 16.4 months, and 39.8 months respectively. The Absorption rate for the entire Sedona market is approximately 8 months.

Sean 1004

The Sedona market continues to look in good shape, and is currently quite active.

Please email or contact me at 928.399.4700 for help with your real estate dreams and lifestyle in beautiful Sedona. Please use my website which will allow you to search the local MLS.

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 at 1370 Hwy 89A in Sedona and the SedonaEye.com Real Estate expert columnist. Contact Sean Baguely, your real estate professional, today.

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12 Comments

  1. Dave, VOC says:

    land prices gone to hell like I thought around here

  2. Dee Dee says:

    bring back the good old days via Twitter

  3. Liked this article on Facebook.

  4. Sarah Weiler says:

    found this after googled Sedona: thanks

  5. My father always says they won’t make more dirt so buy land. Investing in long term real estate has been a safe haven. Stock market is on fire, it’ll blow a gasket soon. Back to basics, land. (former NV agent) Branden Provo UT (better place to live)

  6. Bryan DeCore says:

    Sean,

    Your article is clear and well-researched. Here’s something that came out today that other readers might appreciate and might be of benefit. I’ll be looking for future articles from you. Bryan DeCore

    44% of Homeowners With a Mortgage Can’t Sell: Zillow BY Shanthi Bharatwaj| 05/24/13 – 10:09 AM EDT

    NEW YORK (TheStreet) — About 44% of homeowners with mortgages cannot afford to sell their homes, according to a recent blog post from real estate company Zillow.

    Despite a recovery in prices, over a quarter of homeowners with mortgage loans still owe more than their homes are worth. “But another 18.2 percent of homeowners with mortgages, while not technically underwater, likely do not have enough equity to afford to move,” according to the blog post.

    43.6% of homeowners have less than 20% equity in their homes. That makes it hard for them to move or trade-up, given the considerable costs involved in buying and selling a home, including the cost of a down payment for the next mortgage….

  7. bad enough to have paid to buy here than get stuck under water in sedona, nice essay sir

  8. Bill, Sedona says:

    came johnny lately to your series & like your style, market is teetering at best

    read Normand’s take on it & see little to be excited about in future in real estate or wall street, no escape

  9. Mark, Sedona says:

    I received an email solicitation (unrequested) from a city of Sedona architect that said over and over there was a “wave” of purchases of Sedona real estate and I better get on the “wave” before its all gone. Who is right here? Where’s this guy getting his numbers if yours don’t show it? Do different multiple listings have information that others don’t? Thought it worth asking.

    (So you know I have followed your columns here for a few years now and find them right on the nose but am now wondering if this guy is lying in his email? I prefer not to name him and believe you can answer for all of us that might have gotten this (probably unsolicited) west Sedona architect’s office email. I know quite a few ethical architects around and none seem to share this guys “wave” opinion but then they don’t major in real estate. With thanks. (Sorry for the long winded comment Mr. Editor but thought folks might benefit from some answers.) Sign me Mark, Sedona

  10. Dick, Sedona says:

    What a pretty Sunday morning in Sedona but can feel the heat coming on.

    Have a comment,

    I see more people looking at houses but don’t know if anybody’s buying. Two neighbors had sales fall apart after they were all signed up on paper and that’s in my neighborhood but you don’t see that information posted on the for sale signs when they stay up. One fella said real estate agents say lots of people are “fishing” for properties up here knowing sellers are between rocks and hard places like being unable to pay, gotten old, have died, or moving to be with kids that don’t want mom and dad’s house. Following Rick Normand’s state of city finances articles. I want to say that Sean has an excellent reputation. That’s not so usual for local real estate agents but local good ones are worth their weight in gold. That says something right there. I appreciate the work your writers are doing. I like that they produce quality work. Dick (last name deleted by request), Sedona

  11. Mike says:

    Sean a bunch of well wishes for you.

  12. E. Maddock says:

    In at least one way Sedona remains a small town . . . that being news travels rapidly.

    I do not know you but understand you recently had hip replacement surgery. Joining with Mike (whoever he is) in sending you best wishes for a speedy recovery (w/Doc Randall that’s a foregone conclusion) I further suggest you prepare yourself for setting off bells and whistles if you plan to travel by air. Let us know if you have enough courage for the challenge.

    Welcome to the rapidly increasing Sedona population of “Bionic Parts!”

    E. Maddock

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