SEDONA AND VERDE VALLEY REAL ESTATE THIRD QUARTER 2014
Steady upward pressure in pricing accompanied by a decline in inventory has contributed to the 25% increase in the median sales price of single family homes over the last three years for the Sedona area of the Verde Valley. For the last 12 month period year over year the median sales price of a single family home increased 6% to $418,500, the highest median sales price the Sedona area has seen since 2008.
While the median sales price has been increasing the number of transactions has remained eerily steady at right at 400 sales per year for the last five years, with 396 single family sales in the last 12 months compared to 411 for the previous 12 months and 389 for the 12 months before that. With the number of sales at this level for the last five years you have to say that is our market. If we start to see this number jump, watch out, it might signal the start of our next roller coaster ride.
Along with the increase in median sales price over the last three years we have seen a steady decline in inventory. With the flat number of transactions you have to conclude that this steady decline in the inventory is playing a big part in increased prices. After 2014 inventory peaked at the end of the first quarter there has been a steady decline in inventory over the last 6 months with 10% less inventory at the start of the fourth quarter.
Continuing on from the pace set in the first half of 2014, prices in the rest of the Verde Valley are increasing at a red hot pace. As we have seen from the not too distant past, prices that increase too fast can have some very unpleasant consequences.
Year over year increase: 23%
First 9 months of 2014 increase: 25%
Increase from the bottom of the market: 60%
- Camp Verde:
Year over year increase: 12%
First 9 months of 2014 increase: 19%
Increase from the bottom of the market: 63%
- Lake Montezuma/Rimrock
Year over year increase: 7%
First 9 months of 2014 increase: 15%
Increase from the bottom of the market: 44%
All of these increases in medians sales prices come inspite of a decrease in the number of transactions, supply and demand forces happily at work. In the last two years in the Cottonwood and Cornville area prices have increased 40% while the number of transactions has decreased 17%.
Just the Facts:
The median price of a single family home rose 6% year over year in the last 12 months. The number of transactions continues to remains steady at around 400 single family sales per year as it has been for the last five years. Hard to believe but that is what it is. Vacant land transactions saw a slight increase over the previous 12 months to 138 transactions with the median sales price rising to $150,000 up just 3.4% over the previous 12 month period.
The luxury market, over $1,000,000, saw 29 sales a small drop over the previous 12 month period. At this time there is a 2 year supply of homes priced over $1,000,000.
Cumulative days on the market came in at 132 days for the last 12 months just up slightly from the previous year’s 122 days.
The median sales price for Condos and Townhomes in the Sedona area made steady gains with an 8% increase over the last 12 months. The number of transactions for the last 12 month period is steady at 94 sales compared to 96 for the previous 12 months.
The median sales price for single family homes in the Camp Verde area for the last 12 months rose 12% to $165,000, its highest point in 5 years, while the number of sales dropped to 78 over the previous 12 month period of 116, a 33% drop.
Lake Montezuma and Rimrock:
The median sales price for single family homes in the Rimrock and Lake Montezuma area for the last 12 months rose 8% to $123,500, with the number of transaction down to 77 for the last 12 month period.
Cottonwood and Cornville:
The median sales price for single family homes in the Cottonwood and Cornville area for the last 12 months rose 23% to $193,250. Followed up by the median sales price for the first nine months of the year at $200,000, a 25% increase from the first nine months of 2013. The number of transactions was down to 440 sales for the last 12 months but that is not deterring buyers from jumping up and paying higher prices.
The Bottom Line: Inventory is down and prices are up. Nothing else really seems to matter at this point beyond that. Overall the market for the Verde Valley is steady. Interest rates are still near records lows allowing buyers to keep their payments low if they do need to borrow. Markets in California and the upper Midwest are strong sending us the buyers needed to keep prices on their upward trend, good for sellers not so good for buyers. Foreclosures and short sales are at a pace that they really are having little or no effect on the market, Yahoo. The overall economy is creating jobs at a pretty good pace setting us up for a solid fourth quarter of 2014 and into the first quarter of 2015.
Click here for the complete Sedona and Verde Valley Real Estate 3rd Quarter 2014 report.