Sedona AZ Real Estate Blog

“I don’t want to buy a home today, only to discover that it’s worth less six months from now.”   Given the dire prognostications from Wall Street regarding the national real estate market and the credit crunch that have appeared regularly in the media lately, that’s a reasonable concern.  Why should a buyer rush to make a purchase now?    Timing any market is a tricky business.  No one really knows whether or not the bottom has arrived or whether it is weeks or months or even years away.  The local statistics indicate that we are now in the midst of the worst market for sellers (read, best opportunity for buyers) that we have seen in Sedona since the numbers have been recorded by the Sedona Verde Valley Association of Realtors.  (If you’d like obtain a copy of a lengthy comparative historical statistical analysis, email me at Roy@SedonaRealEstate.com  - you also visit the “Market Conditions” page of our website: www.SedonaRealEstate.com ).  That doesn’t guarantee that it can’t decline further, but there are signs that we could very well see a strong upturn by spring.  The roaring Seller’s Market of 2005 turned on a dime to plunge downward.  We might well see a similar abrupt reversal to the upside if positive market forces come together quickly.  Overly cautious buyers risk missing the market at its most venerable point.  So what are those positive market forces that will give us more buyers?  First, at the national level, we are now seeing mortgage rates at historic lows.  Granted, lenders are being, justifiably, far more selective, but financing is available and being offered at discount rates.  Second, as the Feds rush in to rescue the floundering housing and credit industries we will see a rise in consumer confidence. Third, for Sedona, one of the most significant federal government’s new economic stimulus package is a proposal to raise the Fannie/Freddie mortgage limits from the current $417,000 to as much as $730,000.  And, according to my mortgage guru, Chris Seymour, rates for jumbo loans (those above the limit) are expected to drop a full point.  Fourth, it is true that the national market is made up of collection of local markets with very different fundamentals.  As for Sedona, a reservoir of latent demand has been building for the past two years.  Given our marvelous quality of life and our title (thanks, USA Today) of, “The Most Beautiful Place in America,” people still want to move to Sedona.  Many have been shaken by the national media and have put their plans on hold temporarily, but they still certainly intend to make the move.  A large percentage of those people are Boomers who simply would rather retire here sooner than later.  They’ve been showing up in the past several months in significant numbers to check things out.  Even at this traditionally slowest time of the year, we have been as busy showing property lately as we were back in the height of 2005 and a number of our colleagues have reported the same.  So far, many of those folks have hesitated pulling the trigger yet, but they will.  It’s simply a matter of confidence that now is the right time.  Fifth, we are now seeing the sudden appearance of foreign buyers in the local market, particularly Canadians who are finally enjoying the strength of the loonie against the US dollar. Add our discounted prices to the purchasing power of a very favorable exchange rate and Sedona real estate is a relative steal.  Sixth, volatile stock markets often cause investors to seek refuge in hard assets like real estate.  It’s not easy to live in stocks and bonds. I believe, firmly, that now is, indeed, the right time to buy here.  I’m acting on that and advising friends and family to do the same.    What if I’m wrong and we do see further declines in prices for the remainder of 2008?  If your intent is to invest in real estate here in order to flip it quickly, that would be a losing proposition.  If you are buying for the long term, you can take heart.  You can safely buy the home or lot that really fits your needs at a bargain price and enjoy it right now.  Land prices and construction costs, by the way, are never likely to be this low again. Buy now and you could see short term losses on paper, but you can be confident that your property will be appreciate dramatically in the not-too-distant future.  Why?  Our unique market fundamentals.   Surrounded as we are by National Forest, private property here is a finite resource.  When the land available to build on is gone, it’s gone.  As supply inexorably diminishes, prices will reach levels that are hard to conceive of today.  That, of course, assumes that demand will continue to rise.  Demand will be driven, first by the incoming tide of retiring well-heeled Baby Boomers.  The median age of that generation will be 54 this year.  That’s a couple of decades or so worth of future retirees and second home purchasers.  And, that doesn’t even account for the following generations and the influx of immigrants and foreign buyers. The bottom line is that there’s no time like the present to begin enjoying the benefits of living in Sedona. 

This entry was posted on Monday, February 4th, 2008 at 2008-02-04 and is filed under Roy Grimm, Sedona AZ Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.