The stock market may be faltering but real estate in Sedona is on a roll and here’s my “supporting evidence”.
Last week a local developer came into my office to discuss an anticipated development on the acreage to the south and west of our office at the corner of SR 89A and Brewer Rd. It was a “good neighbor” visit to outline their proposal, which has not yet been submitted to The City, but indicative of a new stage in the market’s direction. What is being proposed could be very beneficial to the cultural and business life of Sedona as well as providing some much needed additional parking near the “Y” – a Sedona Art Museum with accompanying retail and lodging units to justify the expense of developing this difficult, hillside site.
A more concrete example of a vigorous market is what’s happening to prices in West Sedona and The Chapel; the year to date median sales price is up 15% over last year to $510,000 and the average YTD sales price per square foot is up 9% at $250; lack of inventory continues to be a big driver of this trend and it’s still falling – down 28% from last year. We are not alone in this predicament, it’s a nationwide problem which originated in the 2007 collapse of the market which drove many builders out of business.
Funnily enough, the same condition exists in The Village, where inventory is down 30%, but prices haven’t moved up this year – their YTD sales price per square foot is $208 which is 17% below W. Sedona and a real buying opportunity in my opinion.
We’re also seeing more inquiries from people who want to buy a fixer-upper, a common strategy when homes are in short supply. There aren’t too many of these around because our housing stock isn’t very old, but “sweat equity” is a time-honored way of building value. Just remember that whenever you are working with plumbing, electrical, adding square footage or moving walls etc, you need a building permit from The City and if you don’t get one it can really hamper future resale. When using a realtor and their standard documents, all recent work has to be disclosed by the seller to the buyer on a Seller’s Property Disclosure Statement and non-permitted work will cause many buyers to reconsider their choice, walk away or ask for a significant discount off the price.
Speaking of doing work on a home before selling it, ARS 32-1121 (A)(14) also states that all work performed at the property, for the purpose of selling it, must be performed by a licensed contractor if the cost of materials and labor performed, in an aggregate, totals $1,000.00 or more.
This month’s Real Estate Review was written by Andrew Brearley…..