The real estate market in the Verde Valley is hitting on all cylinders as we head into the second quarter of 2018. With inventory remaining in short supply and increased numbers of transactions the result is just what you would expect – significantly increased median sales prices in almost all areas of the market with the exception of the Camp Verde area where sales were strong but median sales prices remained flat.
• Sedona came in at a median price of $534,000 with 484 sales.
• Camp Verde came in at a median price of $219,000 with 117 sales.
• Rimrock/Lake Montezuma came in at a median price of $191,000 with 69 sales.
• Cottonwood/Cornville came in at a median price of $250,000 on 571 sales.
The above data is for sales from the Sedona Verde Valley Association of Realtors for the 12-month period 4/1/17 to 3/31/18.
The tight supply of residential inventory in the Verde Valley combined with the influx of buyers into our market continues to be the story.
Although it appears that we have had a significant jump in Verde Valley residential inventory since January of this year, what is not reflected is the year over year 13-percent increase in the number of sales and the astonishing fact that of the 714 current listings 274 of them, 38 percent, are under contract, leaving just 440 available as inventory. Based on the last 12-month residential sales of 1632 sales in the Verde Valley, that is a meager 3.2-month supply of homes available to the buying public. Truly inventory is in short supply.
Outside Forces Impacting Our Market
So, with the Verde Valley real estate market humming along at interstate speeds, what could possible go wrong?
• Interest Rates? Mortgage interest rate are currently in the 4.25-4.5 percent range for a 30-year conventional loan for a person with good credit. All indications are that the Feds may raise rates again a time or two this year but the interest rate for 30 loans are not expected to raise too much more this year
• The Economy? The overall economy nationwide is strong with unemployment in the 4-percent range with steady job creation. The chance of a trade war looms on the horizon and is causing volatility in the stock market but the overall impact is still unknown.
• Legislation? As it turns out the legalization of short term rentals by our state legislature is having a major impact on our market as buyers and investors are seeking out homes in areas that can be used for short term rentals, taking many of those homes out of the long-term rental market, further exacerbating an already tight rental market. It remains to be seen if this is a long term trend or turns out to be a bust. There is a lot of competition in the short-term rental market at this time while everyone jumps on board.
• Buyers? Every indication is that we will continue to have new buyers coming into our markets. With strong markets all over the country homes are being sold and our buyers are coming to town with a lot of cash in their pockets. Baby Boomers are still moving to the Southwest and the Verde Valley is a prime target.
Just the Facts:
Sedona area: The median price of a single-family home rose 9.4 percent in the last 12-month period to a median sales price of $534,000, its highest point since the same time period in 2008. This results in a 57 percent increase over the last 6 years, pretty close to 10 percent per year. The number of transactions showed a solid increase to 484 sales up 11.5 percent over the previous 12-month period and the highest number of transactions in the same period since 2006. It is interesting to note that the median sales price for single family homes sold in the first quarter came in at $549,000 indicating that there is still upward pressure in pricing in the Sedona market heading into the rest of 2018.
Vacant land transactions year over year showed a solid gain up to 164 sales, 27 percent over the same period a year ago, and the highest number of sales since 2006. The median sales price for the last 12-month period came in at $148,250, a 23 percent increase over a year ago. With the increase in the number of transactions this may be the first real shift in land sales in the last 12 years.
The Sedona area luxury market, prices over $1 million, came in at 40 sales in the last 12-month period, its highest number since the same period in 2007 and a 33 percent increase over a year ago. Inventory in the luxury market has remained steady with 73 listings; 42 of those listings are over $1.5 million making it still a buyer’s market at this price point.
The median sales price for Condos and Townhomes in the Sedona area for the last 12 months came in at $280,000 the same number as 2017. The number of transactions for the last 12-month period came in at 118 remaining steady when compared to all of 2017
Cumulative days on the market came in at 102 days down slightly from a year ago but at the lowest point since 2005, a further indication of the strength of the market.
Camp Verde: The median sales price for single family homes in the Camp Verde area for the last 12 months remained virtually unchanged compared to the previous 12 months at $219,000, in spite of the 31 percent year over year increase in the number of sales at 117 transactions. The medians sales price for single family homes in the first quarter of 2018 came in at $218,500 just a tick higher than the $217,500 of the first quarter of 2017. Residential inventory in the Camp Verde area as of this writing was at about an 8.5-month supply which might be having an impact on the slowing of price increases.
Lake Montezuma and Rimrock: The median sales price for single family homes in the Rimrock and Lake Montezuma area for the last 12-month period came in at $191,000 up 9 percent from a year ago. The number of sales was up 9 percent to 69 sales for the last 12 months. This is the highest median sales price in this area since the same time period in 2009.
Cottonwood and Cornville: The median sales price for single family homes in the Cottonwood and Cornville area for the last 12 months came in at $250,000 up 7.9 percent from a year ago. This marks six years of increased prices and reflects an overall increase of 97 percent over the last 6 years, who would have thought this strong recovery was possible in the depth of the recession in 2012.