The Sedona Verde Valley Association of Realtors reports 2010 has been a better year so far than 2009, but home sales have started to drop in the last few months.

Sedona Verde Valley Association of Realtors Vice President Tod Christensen said the $8,000 tax credit the federal government gave to first-time home buyers through April 30 appears to have helped the market the first four months of the year.

Since the tax credit expired, home sales have decreased, he said.

So far in 2010, 353 homes in Sedona sold for about $145 million compared to the 274 properties for a little more than $125 million for all of 2009.

While the figures show Sedona real estate agents are faring better in 2010, Christensen said the numbers only tell part of the story.

He said the first half of 2009 was abysmal, but believes the tax credit helped the market a little in the second half of the year.

Christensen said people might be waiting for the November election to end before deciding whether to purchase a home.

“They kind of go into a shell before buying,” he said. “Once the election is over, people will breathe a sigh of relief.”
“At the end of the day, 2010 will be a better year, but not dramatically,” he said.

The middle of September to November, Christensen said, is usually a busy time for real estate and he wonders if this trend will continue.

Homes under $400,000 are starting to sell, and homes in the $400,000 to $600,000 range are suffering a little, but still selling, he said.

Homes on the market for $600,000 and above are not selling. Christensen said a person owning a $1 million home does not need to sell and can usually ride out the market until it recovers.

Christensen predicts homeowners will see prices remain or drop a little during the next 12 months, but it won’t be another 25-percent decrease that happened four years ago.

“We have a paper cut right now instead of having our whole arm cut off,” he said.

Roy Grimm, an associate broker in the Sedona market, said the number of home sales are increasing, partly because it is still a buyer’s market.

For the first eight months of 2008, 152 homes sold for a median price of $493,000. From January through August in 2009, Grimm reported 211 homes sold, but the median price decreased almost $70,000 from the previous year to $424,000.

While it is a positive sign homes are selling again, he said it is not good prices continue to drop.
There are 62 foreclosed homes in Sedona under contract at a median price of $323,000, which will dramatically affect the housing market when the houses officially sell.

“It looks like the price will take a dive,” he said.

Homeowners putting their houses on the market are facing difficulties because they have to compete against homes under foreclosure at much cheaper prices.

“Lower prices are bringing the buyers in,” Grimm said.

Hardly anyone is looking to buy a luxury home right now, and houses purchased for more than $1 million cannot recoup close to what homeowners paid, he said.

Pam Fazzini, a real estate agent in Sedona, said most buyers are purchasing houses in the $300,000 to $400,000 price range.

Luxury homes, she said, are the houses decreasing in price the most. It is not uncommon to see a million dollar home in Sedona dropping 20 to 25 percent in value because of the market, she said.

Fazzini said home sales in Sedona really slowed down for a while.

There are two busy seasons for real estate agents — spring and fall.

“People are hoping for a good fall,” Fazzini said. Summer is a not a good time for real estate agents in Sedona because the area is more of a destination spot for vacationing families.

“Obviously, if someone wants to buy a house, they can buy anytime,” she said.

What really has affected the market the most is the lack of high-end sales, she said.

“When you look at the sales, we are seeing more lower-end sales,” she said.