E-Newsletter
January 2007
2006 The Year in Review
Well, the clock has finally struck midnight on 2006 and as far as Real Estate
goes it wasn’t a great year but hardly a disaster either. Let’s take a few
moments and analyze the final statistics from the year, you may be a little
surprised and what you see. In terms of home sales in Sedona there were 502
homes, condos, and mobiles sold in 2006. Down from 679 in 2005, which was a 26%
drop in units sold. The real surprising thing here though is that the vast
majority of those units were homes under $600,000. Of the total number of 177
homes representing the decline in sales from 2005-2006 173 of those fell in the
category of under $600,000. That means in terms of total sales for homes priced
above $600,000 2006 was as good a year as 2005. Stop and think about that for a
moment. Are you as surprised as I was when I first saw that?
Ok, so now a lot of you are saying, “Well what about all that crap you were
saying about the market being down?” Well the market was down, substantially but
not in that particular segment and even in that segment sales slowed
dramatically in the last six months. Everyone now kind of forgets that the first
six months of 2006 were off 2005 but weren’t all that bad, certainly not for us
at Coldwell Banker First Affiliate as we watched our market share increase
substantially. More on that later. In fact in 2006 there were more sales than in
2005 for homes priced over one million. We sold 54 homes over one million in
2006 up from 48 in 2005. That’s real weird for a slumping market. In fact I’ve
never even heard of that type of statistic before. So again you are wondering
about this decreasing market. Well you know that home sales were down pretty
dramatically under $600,000 so that tells us that a lot of the people who could
just barely afford Sedona in the past got priced out of the market. The other
big decrease was in Vacant Land.
In 2005 there were a total of 297 vacant lots sold but in 2006 that number
dropped to 116. That’s a 61% decrease! Now that’s a big number. That decrease to
me indicates a trend and that will have a lasting impact on the Real Estate
market for years to come. The trend is actually two fold. Number one; there
aren’t as many lots available as there has been in the past. You probably all
know there is very little available for tracts of land able to develop. They are
still some but nothing larger than five acres so aside from the Cor D’amor
subdivision, currently finishing up the ground work just before the Hospital,
you won’t see any more large subdivisions in Sedona, maybe ever again. But
curiously enough that hasn’t meant a larger demand for the existing lots. Buyers
reacted to the price of a vacant lot like shoppers the day after Thanksgiving
would with a regular priced item. They just weren’t interested and as building
costs continue to climb sellers of those lots probably won’t see demand increase
for them any time soon. If you’ve ever built a home you will probably understand
that most people agree it’s an experience everyone should enjoy, once. After
that most people agree that buying an existing home is just so much simpler that
it outweighs any of the little negatives about not being able to build the home
exactly the way you would want it. Trend number two would be not to expect
demand to increase dramatically anytime soon for a number of reasons. So the
impact of declining lot sales and decreased new construction will impact
Sedona’s market for the foreseeable future as the Resale market reaps the
benefits. Of course we still need to have buyers who can afford to live in
Sedona.
Sellers in any price range still can’t expect to increase asking price too much
more but the good news is that if you need to sell you should be able to in 2007
and if you’ve been in your home over three years you should still be fairly
happy with your appreciation number.
One more little note, even though it’s way to early to call this a trend.
December of 2006 was up quite a bit from December of 2005 for CBFA in terms of
volume sold. So hopefully that is the official start of the rebound. I mentioned
market share a little earlier. That’s the term we use when comparing the amount
of Real Estate sold by CBFA as opposed to the total amount sold by the entire
MLS. Our historic average has always been right around 20% in the Sedona area
but in 2006 we increased that to just under 25%. That’s a pretty substantial
increase for one year so we have you our loyal clients to thank for that and you
also can feel safe knowing that you trusted the top Real Estate company to
handle your transaction.
Thank you for your business and Happy New Year!
Tod Christensen
Designated Broker/Vice President
Coldwell Banker First Affiliate |
