The real estate market is entering a different phase of its cycle as new homes and subdivisions make a very welcome return into a market that is desperate for more inventory. After the crash of 2006, construction came to a crashing halt as prices tumbled and speculative financing evaporated; remember all those half-completed homes and subdivisions that became tumbleweed “farms” and were then demolished after the buyers dried up? Well, just as the phoenix rose from the ashes, so are those projects.
It’s estimated that we have a deficiency of several millions of new homes in the US because of that hiatus in new development – our population is growing faster than our housing stock. And just as Arizona was one of the worst hit states, now it is projected to lead the way in 2017 with Phoenix and Tucson slated to be in the Top Ten for national growth in real estate sales volume. How will that affect us in Sedona and The Verde Valley?
When you consider that about 65% of Sedona buyers already live in our state, we will feel the back-draft of growth. As I drive around town, and other Northern Arizona communities, I can’t help but notice all the new homes going up as entrepreneurs scramble to fill a need that the resale market can’t satisfy. These new homes are a lot different from our early housing stock; they have granite counters, stainless steel appliances, elevated ceilings, open floor-plans and all manner of modern conveniences. This will cost you about $300 a square foot of livable area in Sedona, including the land, but it may be one of your few options in some price ranges. There are no new vacant land or home subdivisions in town yet but an abandoned project like Bella Terra on The Loop Road is probably on some developer’s radar.
In Cottonwood/Clarkdale, Kendra Heights and Crossroads are coming back after lying dormant since the crash and Greyfox is close to build-out. Mesquite Hills near the Cottonwood airport is a very popular choice for new home buyers and two other subdivisions are in the formative stages on the lower road to Clarkdale.
I also called the long-time Coldwell Banker manager in Prescott, Randy Randall, and he spoke of four new subdivisions over there; all of them will be new home sales, not land sales. One of them is on the north side of 89A as you drop down off of Mingus Mountain, across from Prescott Valley; I remember when that area was called Lonesome Valley – not any more!
Finally, I consulted with the New Homes Division of CB in The Valley. New building permits are running at elevated levels there also as the metro area grows, particularly in the East Valley.
This week’s Real Estate Review was written by Andrew Brearley….