Real Estate Review.
And they’re off! The real estate market throughout the Sedona/Verde Valley market is off to a good start with unit sales and dollar volume of those sales down about 5% over January 2018- within most people’s margin of error. This is despite a world-wide sense of anxiety about the future as nations switch from embracing globalism to embracing protectionism, which normally leads to slower economic growth.
I believe that our local real estate market is going to navigate this new year with relative ease as traditional financial assets, like stocks, take a breather after ascending to dizzy heights; what better place to put your money than locally where you can keep a close eye on the market and take your own decisions accordingly? My advice to local owners is to sit tight and see what 2019 brings.
Well what about The Fed which has signaled a pause in rate increases and numerous economists who are predicting a global slow-down? I have lived through a number of corrections in the Sedona real estate market, about one every 7 to 10 years, and the majority of them lasted 12 to 24 months and saw prices slip about 5% to 8% at the most before recovering. That is my worst case scenario but I also see the potential for some modest upside gain.
Although sales fell in January when compared to 2018, inventory of single-family homes is at the lowest I have seen it in 38 years and that will be a strong influence in maintaining, or maybe growing, local prices. Homes that come on the market under about $700,000 continue to receive multiple offers from anxious buyers who have lost out on previous new listings. That alone will be a strong support for maintaining current price levels and if rates do flatten and wages increase, those will reinforce matters.
Last year, Camp Verde residential was the local winner with a 13% median price increase and Cottonwood land saw a huge 60% gain in price. I don’t see any increases of those magnitudes but the Cottonwood number did make me wonder if it was the beginning of the long-awaited rebound in land prices! Stay tuned and we’ll revisit these topics as the year progresses.
This month’s Real Estate Review was written by Andrew Brearley…