Sedona and Verde Valley Real Estate
Second Quarter 2015
The second quarter of 2015 showed a strong rebound over the first quarter for sales of single family homes. In the first quarter 2015 there was only 72 single family homes closed, we ended up at 199 for the first 6 months, 127 closed sales in the second quarter. That puts closings right on track for the 400 single family sales per year that we have had for the last 6 years.
The segment of the market that showed real strength in the second quarter of 2015 was the $500,000 to $750,000 price range. In the first quarter there were only 7 closed single family sales in the price range and there were 101 active listings. By the end of the second quarter there were 44 closed sales and 104 active listings. That segment of the market made up 22% of the sales in the first half of 2015.
The last 12 months has continued to see upward pressure on the price of a single family home. In spite of the fact that that numbers of transactions and inventory have remained relatively stable over the last three years the median sales price of a single family home has gone from $330,000 to $442,000, a 33% increase. In the last 12 month period prices have risen 10.6% year over year.
What we have seen developed over last several years is a healthy market where the normal market forces of supply and demand come into play. We have had a steady amount of inventory and a steady demand, in all but the highest price ranges resulting in moderate price increases. It is a boring story, but after the thrill ride of the past decade in housing, boring is a very good market to report on.
While we have seen a solid recovery in the residential market in the Verde Valley we have yet to see vacant land get on a solid footing. The Sedona market saw land prices skyrocket in 2004, 05 and 06 reaching its peak in the $450,000 range and staying close to $400,000 through 2007 and 08. There were over 400 sales in the 2004-05 year, dropping down to 229 in 2005-06 and bottoming out in 2006, 07, and 08. It is interesting to note that even with the number of transactions dropping off in 2006, 07 and 08 prices remained strong. The market was in free fall but not recognized by vacant land investors or realtors for that matter.
Vacant land prices bottomed out in 2011-12 and we have seen moderate price increases in the last couple of years. Demand for vacant land softened in the last 12 months with prices falling 11% year over year primarily due to the lessening of demand, with the number of transactions dropping to 111 for the last 12 months compared to 140 in the previous 12 months, a 21% drop in the number of transactions.
Just the Facts: Please note the following statistics are for the 12 month period 7/1/14 to 6/30/15 and are compared to the previous 12 month period 7/1/13 to 6/30/14.
Sedona area: The median price of a single family home rose 10.6% over the previous 12 month period. The number of transactions in the last 12 month period dropped to 386 transactions, down 3% from the previous 12 month period.
Vacant land transactions for the last 12 month period came in at 111 transactions down 21% from the previous 12 months of 140 transactions. Vacant land prices dropped in the last 12 month period to a median sales price of $150,000, down from $168,650 for the previous 12 months. Vacant land sales overall are still very soft and have not seen any real strength in the market.
The luxury market, over $1,000,000, has seen 36 sales in the last 12 month period up from 27 in the previous 12 months. This is the largest number of sales in this segment of the market since 2006-07.
Cumulative days on the market saw a 23% increase in the last 12 month period jumping to 147 days. As prices increase I think we will continue to see a longer time on market
The median sales price for Condos and Townhomes in the Sedona area rose to $279,900 over the last 12 month period up from $240,000 for the previous 12 month period, a 16.6% increase.
The median sales price for single family homes in the Camp Verde area rose 15.8% in the last 12 month period over the previous 12 month period to $175,000. The number of transactions is down to 78 transactions over the last 12 months compared to 98 from the previous 12 month period.
Lake Montezuma and Rimrock:
The median sales price for single family homes in the Rimrock and Lake Montezuma area rose to $142,000 up just over 7% over the previous 12 month period. That is a 79% increase over the 2010-11 time periods. Pretty phenomenal! Number of transactions for the last 12 months was down to 71 sales in the last 12 months compared to 76 for the previous 12 months.
Cottonwood and Cornville:
The median sales price for single family homes in the Cottonwood and Cornville area rose to $199,999 for the last 12 months, up just over 11% over the previous 12 month period. The number of transactions was steady at 473 sales for the last 12 months.
The Bottom Line: The residential segments of the Sedona and Verde Valley real estate markets have been on a solid run for the last three years. The Sedona market has seen approximately a 33% increase in the median sales price of a single family home. We have to feel good about this kind of gain. Interest rates remain in the 4% range, and underwriting although stringent has softened a bit. Inventory is steady and looks to remain so throughout the rest of 2015. With steady demand, stable interest rates and inventory that is in balance with demand, residential property in Sedona and the Verde Valley should see continued moderate price increases for the rest of 2015.
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