Sedona real estate sees a surge after COVID5 min read

David Jolkovski/Larson Newspapers

When discussing the topic of real estate, Warren Buffet once said, “Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it.”

As life returns to some semblance of normalcy, signs of the Sedona area real estate market bouncing back are evident.

“In early to mid March when the shutdowns started I would have guessed that the Sedona real estate market would flatten out — but it’s done the opposite,” said Rick Wesselhoff, of Coldwell Banker.

The area’s market of homes under $800,000 is strong, with many homes selling in a matter of days or weeks, he said. Wesselhoff attributes this to a tightening of inventory. There are less homes to choose from, so demand remains high.

“The best homes for our market are newer, single-level homes with some red rock views,” he said.

In terms of what he expects to see from the housing market over the next six to 12 months, Wesselhoff said that with the current level of activity and interest, he envisions the market being strong for several months to come.

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“Inventory is low and buyers are eager to get out of cramped big cities and relocate to sunny Sedona,” he said. “We will likely see some underutilized vacation rentals come back on the market. It’s just starting to happen now with a few coming on the market every week. We’ve not been flooded with these, but it’s important to watch this segment of the market for movement.

“We also don’t want to lose sight of the presidential election which histrionically tends to soften market conditions.”

On those same lines of short-term vacation rentals, Wesselhoff said there’s two ways to look at it. First off, many investors who overex­tended might not be able to hold on. This is more likely true for investors who own multiple short-term rental units. Secondly, for those who are able to hold on, he thinks their deci­sions will be based on how well and how quickly the tourism industry recovers and how quickly weekly rental rates go up.

“Depending on those variables, it might make more sense for them to sell or switch to long-term rentals,” he said. “The rebound of the tourism industry will be crucial in deciding their next steps.”

Tim Cox, of Realty One, said when the pandemic began, buyers stopped coming to Sedona and sales activity “slowed to a crawl.” Sellers delayed putting their homes on the market and a few took their homes off of the market as they didn’t want people in their houses. That lasted about six weeks.

“The switch was turned back on around May 15,” Cox said. “Buyers returned in force. There were some purchases made without visiting the property and we did some face time videos for people before they came.

“The sellers are just starting to ramp back up and more and more homes will hit the market early June. Essentially, the busy spring market got started six weeks late and is currently in full swing.”

Cox said prices are not suffering as a result of COVID-19 but rather as a result of inventory levels. As of Wednesday, June 3, there were only 165 single-family homes available in all of Sedona including the Village of Oak Creek. There have been 181 sales of single-family homes this year to date and 499 in all of 2019.

“Using 2019 numbers, we have four months of inventory,” he said. “Generally speaking, above six months is considered a buyer’s market and under six is a sellers market. If we sold every home on the market we still wouldn’t get to 2019 volume. Unless, of course, we get many more listings.”

Like Wesselhoff, Cox said he sees good things in the near future. He feels there’s pent up demand due to the delay and that will feed the buyers market through the summer and fall. Beyond six months will depend on a few things like the stock market and whether or not the rest of the nation will see a decline in real estate.

“The inventory issue is a national one but if states that feed Sedona like California, Texas, Michigan, Illinois and New York struggle with selling homes then we will see an impact,” Cox said.

Gary Whorton, of Re/Max Sedona, said in March and April people took a wait-and-see approach. But that has since changed.

“May was akin to Walmart shop­pers on Black Friday — looking to get their hands on one of 15 high-quality televisions or in this case, houses,” he said. “May was busy. For sellers who’ve updated their homes, priced correctly, and presented their properties through great marketing to potential buyers, they got traction and hopefully saw a purchase contract.”

Whorton said he feels it’s a bit too early to tell what the pandemic’s impact on pricing will be, though he thinks things will hold steady for now.

“Sedona is a unique animal when it comes to real estate, pricing and market time,” he said. “With our sheer quantity of custom homes and pricing factors — like red rock views — every house is different and needs to be treated as such.

“There’s reason to believe that the national market is headed for an adjustment. Just how significant remains to be seen. I’ve got a buyer pool at the moment that includes people from Southern California, New York, New Jersey and Chicago. In each case, the pandemic has had an impact on their decision to relocate to Sedona. One thing is for sure, people want to be in Sedona.”

Ron Eland

Ron Eland has been the assistant managing editor of the Sedona Red Rock News for the past seven years. He started his professional journalism career at the age of 16 and over the past 35 years has worked for newspapers in Nevada, Hawaii, California and Arizona. In his free time he enjoys the outdoors, sports, photography and time with his family and friends.

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Ron Eland has been the assistant managing editor of the Sedona Red Rock News for the past seven years. He started his professional journalism career at the age of 16 and over the past 35 years has worked for newspapers in Nevada, Hawaii, California and Arizona. In his free time he enjoys the outdoors, sports, photography and time with his family and friends.