Home Hunters <br>Verde Valley real estate dips from 2000 <br>high but housing sales remain strong
The New Year in real estate began like the new economy.
After breaking into January with a respectable $5.5 million in sales, local real estate revenues backed up into a two month slump.
But like dot com layoffs helped to cushion earning losses for high tech, the February and March slowdown in the Valley's real estate market may have set the stage for increased earnings May through June.
Summer gains, however, are not indicative of a continuing real estate boom.
In the lower Verde Valley, 2001 sales from January to June decreased nearly 55 percent from last year's revenues during the same period.
David Spears of Acsel Realty in Camp Verde says he has no idea why sales have dropped so substantially but suggests it might have to do with some sellers unrealistic view of their property's value. "Sometimes they'll go through three or four realtors in a yearlong campaign to sell their home," he said. "Many properties on the market are way overpriced."
And although the Upper Verde Valley market resisted a similar plunge in sales, the region's 7 percent loss in 2001 was also a curiosity.
"We noticed a 17-percent drop in the second quarter in the Cottonwood, Clarkdale area," said Broker Donna Piper of Professional Realty Group. "In March it was real slow and we tried to determine what had changed, what was different."
Both regions may have simply suffered from the early year adjustment of the Dow, said Piper. "Maybe people were afraid to do anything," she said. "At that time Mortgage rages hadn't dropped too much."
According to Multiple Listing Service Reports, Camp Verde, Lake Montezuma Rim Rock and Verde Lakes real estate offerings brought in just $10.7 million compared to last year's January to June sales of $19.4 million.
The Upper Valley communities of Cottonwood, Clarkdale, Jerome Cornville, Bridgeport, Oak Creek Valley and Verde Village outpaced the competition, bringing in $30.68 million in real estate sales this year as opposed to the impressive January to June sales of $32.74 million in 2000.
Both regions experienced a one-month slump early in 2001.
In February, sales were off more than 50 percent in the Lower Verde Valley while March similarly impacted Upper Valley sales as that region's monthly revenue plunged to $1.58 million in comparison to a monthly average of $4.38 million.
But like the new economy, analysts agree a strong real estate market may be here to stay as consumers continue to buy homes and mortgage rates continue to dip.
According to HSH, a publisher of mortgage information, a 30-year fixed rate mortgage stands at 7.27 percent, a 15-year can be found at 6.83 percent and a one-year-arm is available at 6.05 percent. Last year rates for 30-year mortgages averaged 8.21 percent and rates for 15-year mortgages stood at 7.93 percent.
"It's picked up," said Piper of Cottonwood area sales. "With lower interest rates we are seeing first time buyers buy a little more than normal. They can buy more house for the same monthly payment."
After nine years of real estate sales in Camp Verde, Spear said his observations are that lower interest rates don't jump-start sales figures significantly.
"Maybe it's about wishful thinking," he said. "But people don't take advantage of rates until they start climbing back up and then they panic."
And as consumers across the nation shop for a new residence at a median sales price of $170,200, the Verde Valley real estate market looks like a bargain. Spear said in Camp Verde buyers are choosing properties between $80,000 and $150,000.
And this year bargain hunters in the Lower Valley discovered homes priced under $99,000.
"A lot of young families buy in that price range," said Spears. "It's the cheapest they can get into."
Residences sold in this category eventually pumped more than $1.7 million in sales into the Camp Verde economy, nearly 16 percent of overall real estate sales between January and June. Cottonwood homes priced under $99,000 contributed more than $3.2 million.
The affordability of mobile homes also attracts buyers shopping in Northern Arizona. According to MLS reports, there were more than 50 manufactured homes sold in the Verde Valley from January to June. Sales in Cottonwood reached $2.3 million.
"Mobiles are selling quite well this year," said Piper. "You can't find any other kind of housing for less than $90,000."
But across the nation, homes priced between $100,000 and $199,999 remain the first choice for new home shoppers generating an average of 40 percent of all real estate sales in the Verde Valley from January to June.
In the Upper Valley, Piper finds buyers approaching the $100,000 to $125,000 sales price with ease. "More people can afford that and some retirees can afford to pay cash in that price."
According to the U.S. Census Bureau, homes in the $100,000 to $199,000 category made up 52 percent of all homes sold nationally with a median of 5.3 months on the market.
Last year home sales in the Verde Valley made up an average of 81 percent of overall real estate sales and if residential lot sales in the Verde Valley prepare the ground for future home sales, January to June reports look favorable.
According to the MLS reports, 38 residential parcels have been sold in 2001 throughout the Verde Valley.