The heat of the summer has come and gone, but the Sedona residential home market has some built up heat and it's making it tougher for buyers...  Lower overall inventory of homes is turning up the heat on buyers for modestly priced homes.  The sub $650k market is fairly hot right now - with only 181 homes on the market and 64 already tied up (soon to be 65!) - so that means that our real inventory of homes in the Sedona area is down to 117.  If we split that up into Sedona city limits - you'll see only 44 available homes and 58 in the Village of Oak Creek. 

Well priced homes in this HOT category are often selling in a matter of hours or days - so if you're waiting for the right one to come available - here are some tips to help get your offer to the top of the list:

1) Get Pre-approved and have the paperwork ready when you're shopping for a home.  Our newest AZ state real estate purchase contracts require prequalification paperwork if you're needing a loan for a house - so the quicker you're ready, the quicker a seller can accept your offer

2) If you're paying cash - have proof of liquid funds available to show with your offer.

3) Consider a shorter inpsection period (consult with your agent about availability of home inspectors)

4) Consider a larger earnest money deposit - 1-3% is normal - but when you're in competition with other buyers, you might consider 10%.

5) Quick closing - if you're cash - offering to close in 14-21 days will put you ahead of offers that have loan contingencies - as they'll need 4-6 weeks to close a loan. 

6) Don't be afraid of going over the listing price.  For years we'd seen $1k-$3k over listing as a shoo-in to get an offer signed - but we've seen offers with $10k and $20k over the listing price if it's a desirable place with lots of competition.

7) Lean on your agent for value of the home - there are times when agents will list a house for under market value and drive the bids skyward.  It's wise to know where and when to stop as well!

 

 

Cooler, wetter monsoon season seems to have cooled our local real estate market for the time being - don't get me wrong - it's still a hot market - especially if you're looking to buy or sell something within the city limits under $500k.  The best deals go within hours of listing and even fairly priced homes are selling quicker than expected.  For example - and older 1700 sq ft home hit the market yesterday at $350k - and although it needed work, it sold immediately.  It was a decent deal, but scarcity is driving buyers to snap up homes in the lower price ranges.  I'll refer back to one of my recent blogs to say that the availability to rent homes via AirBnB or VRBO is driving part of the market - which is why sales are slower in the VOC (for the most part - they're outlawed in that part of town!)

Current inventory of residential units in the entire Sedona area:

Under $500k -    117 (38 already tied up with buyers) - True availability - 79 (only 43 are single family homes - the rest are condos, townhomes, and manufactured homes)

$500k - $750k - 72 (22 already tied up with buyers) - True availability = 50 (all single family homes)

$750k-$1M -       55  (9 tied up with buyers) - True availability = 46 (all single family homes)

$1M+ -              63 (6 tied up with buyers) - True availaiblit  = 57 (all single family homes)

 

Total inventory of Sedona residential units currently on the market = 304 units (74 in escrow) = true availability = 230 (193 homes)

Barely had time to write this update - the market's teeming with activity in the residential market - but interest continues to lag in vacant land.  We're already seeing results of the AZ governor limiting any municipality from cutting homeowners rights to rent their place - as there's been a marked increase in sales within the city limits (where short term AirBnB style rentals are mostly allowed).  The Village of Oak Creek (where they've upheld the 30 day rental minimum) on the other hand is seeing less activity, less sales and flat pricing in comparison.  For those of you shopping on MLS powered websites if you're looking for vacation rental properties try to focus in on areas 40,41,42,43,44, and 46.  Area 45 is designated as VOCA - and they've decided for the time being at least - to keep the 30 day rental minimum. 

The interest level is peaking this spring and inventory levels are low - so when decent places come on the market - they're selling quickly.  There are currently only 21 available single family homes available within the city limits under $500k.  This is by far the fastest moving segment of the market - with 55 sales already this year.  That sales rate for this price range comes out to 14 sales per month - and with 21 on the market right now - we have only 6 weeks of inventory in this price range.  That's the lowest level of available <$500k homes we've seen in 10 years and signifies a sellers market.  If you're looking to buy in this range - be sure to read my prior post about how to best prepare yourself for a sellers market. 

Moving up a notch - our mid range homes ($500k-$1M) within the city limits - there's considerably more inventory.  We're looking at a current group of 60 available homes and 50 sales this year.  That's a rate of 13 per month - giving us a current 4.6 month inventory of available homes.  This is still significantly lower than normal - and this is bordering on a balanced market - but it's tipping in the favor of sellers right now. 

Vacant land sales in all of Sedona saw a jump in sales in February (12 sales), but came back down to earth with only 4 sales in March.  I was hoping for an upswing of activity to lead the way for the rest of the year - but we'll see how the nubmers turn out for April and May.  There are 318 available lots in the Sedona area - and 22 tied up with buyers.  That's a pretty decent amount of escrows - so keep an eye out for an upswing in activity in the coming months!

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.

Assuming that this year fits the mold of past years, we'll soon be wrapping up our BUSY spring season.  It's been marked by increases in prices within the city limits (more on that later), shrinking inventory, and competitive buyers.  There are currently 346 residential units on the market, but a whopping 96 are already pending sales - leaving 250 available - 135 within the Sedona city limits, 92 in the VOC, and just 23 in the Loop Road area and Oak Creek Canyon.  If we narrow the search to Single Family homes - the situation gets a little more interesting. 

 

Single Family Homes:

Sedona - 120 available

     <$300k          - 0

     $300k-$500k   - 17

     $500k-$700k   - 28

     $700k-$1M      - 35

     $1M+             - 42

VOC - 72

     <$300k          - 1

     $300k-$500k   - 21

     $500k-$700k   - 23

     $700k-$1M      - 17

     $1M+             - 10

 

I'd evaluate this and start out by saying that the glaring thing here is that there's only 1 site built house in the Sedona area under $300k.  Hurry - it might be gone by tomorrow.  We normally see many buyers looking in the lower ranges (<$500k), it's the healthiest part of the market and where the majority of the sales take place.  We're seeing many multiple offer situations and homes selling for full price or up to $10k over.  I've written tips before about getting your offer selected as "the one" - but in the end, it's about price, cash down (full cash trumps other offers), quickness of the inspection period and quicker close.  Many buyers have the cash available to write strong cash offers, so buyers needing a loan are behind the 8ball.  It's up to you and your buyers agent to discuss strategy if you're going to be in compeitition with other buyers - so come prepared!

Persistence also helps (right Roberta?).  If an offer's already been accepted, it doesn't hurt to submit a strong back up offer and be ready to perform should the first buyer fall out due to inspection issues. 

All in all - we're in a sellers market within the city limits, and it's a fairly balanced market in the VOC.  The strength of the market within the city limits has been partially attributed to the city allowing AirBnB rentals - and the relative weakness in the VOC market is partially a result of the VOC upholding the 30 day rental minimum.  I see the validity of both sides, so I'm not here to talk about that (right now) - just to report trends...

 

 

If you blinked, you missed it.  The Sedona real estate market went from a balanced market to a sellers market over the last few weeks and we're seeing many multiple offer situations in Single family homes within the city limits under $500k.  If it's priced near the market value - there are people waiting for homes like this and they'll pounce on it.  This quick post is to help give guidance on what will give you a leg up on competing offers. 

Many times there are cash buyers waiting out there and cash buyers almost always trump any offers with a loan contingency.  So, if you're needing a loan to buy a home - use the following tips to help compete against the others:

1) Get a prequalification in advance - This state mandated form shows that you've already spoken with a lender and that they belive you to be credit worthy.  This form is MANDATORY when you submit your offer.  An offer submitted without a prequal isn't a valid offer. 

2) Do yourself a favor and get the prequal letter from a LOCAL mortgage broker.  Big banks and out of area/out of state lenders tend to be slower and less likely to be able to get local appraisers and push the deal forward - so often times selling agents will give preference to offers with local, trustworthy mortgage specialists

3) Offer more earnest money   The standard around here is 1-3%, but if you want it, consider putting more down as earnest funds (talk to your agent about the implications of this)

4) Inspection period - AZ state contract has 10 days in the boilerplate and many agents are asking for 12-15 days.  Consider speaking with an inspector to find availability so that you can act quickly and keep a short inspection period.

5) Purchase price - If it's a good deal on paper and you view it and it works for you - consider offering at least full price when making an offer.  If you're waiting to see the home because another agent is showing it to other buyers - take that as a clue and know that you're in competition with that buyer.  I've seen homes go for up to $10k over list price for a well priced home in a good neighborhood.  Of course, speak to your agent about this and make an informed decision.

6) Be here to see the house.  I know - it sounds like a no-brainer, but offers that come in from buyers and agents that haven't been into the house will be viewed as a lower tier offer.  At the bare minimum if you can't make it, have your agent view the home and FaceTime or video chat with you so that you can see the home prior to making any offer. 

Happy Springtime!!!

Year end totals show an interesting set of facts (Not alternative facts) as to where buyers of Sedona Real estate originate.  Granted, the data isn't from ALL purchases, rather from a sample size of approximately 25% of all purchases in 2016... and with a sample size so large we should be able to use this data as indiciative of the overall market.  The shocking part of the study shows that 54% of all Sedona purchases are made by Arizona residents.  The second largest group of buyers came from California with 15% of all buyers, then all other states make up the remaining percentages.  An underwhelming percentage of buyers came in internationally -  approximately 1% of our buyers were from out of country.  So, those sellers waiting for an international buyer would do much better to hope for an AZ buyer - there's a lot more of those around than the occasional Canadian, European, Russian or Asian Buyer.  Selling agents would be doing their clients a favor to keep the marketing dollars focused on in state buyers! 

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