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August 2, 2022 Sedona Verde Valley Market UPDATE from Erin’s desk:
The market shifted considerably in late April 2022 in the Verde Valley. We are now in a buyer influenced market. Easter weekend was like a light switch: “on” up until Easter weekend – then “off” after that weekend.
The shift coincided with lending rate increases and an increase in listings by homeowners wanting to take advantage of the surge in sales we had been experiencing.
Here is what it felt like:
Prior to Easter the market was CRAZY for 2.5 years. Jam packed with 8, 9 and sometimes even 10 showing schedules for every listing the first day the home hit the market. Minimum 3 to 5 contracts by the third day of a listing and all competing for the best offer. Offers were over the listed price. In some cases, buyers waived their inspections (which is not recommended). Homes were being sold as is, sellers making minimal repairs.
Just after Easter showings stopped entirely for a week. Slowly showings resumed to 1 or 2 showings weekly. If a home is priced right, in good condition with sellers receptive to make repairs, an offer can now most often be expected within 5 to 8 weeks. Buyers are taking time for second showings and then deciding. If they feel the home is overpriced, they are waiting to watch the home for a price reduction. Because prices are still high (indicating a good time to sell) buyers are paying top dollar and expecting a quality home in return.
Sellers are still in a good equity position to sell their home. But sellers that are still holding out for the high price offer are running into the stark reality that that ship has sailed. Pricing right based on comparable sales is key to getting a home sold. Sellers are experiencing contract cancelations if a buyer asks for repairs and the seller is unwilling or unable to make the repair.
Homes available are still limited in the Verde Valley so prices remain historically high. Listing must be linked to reality and not just wishful thinking. Price reductions in listings are specific to sellers pricing too high and not a slipping economy.
The shift coincided with lending rate increases and an increase in listings by homeowners wanting to take advantage of the surge in sales we had been experiencing.
What does THIS market shift feel like to a seasoned Realtor?
Well, for all intense purposes it feels “normal”. Just not a Covid crazy market on steroids.
Note to buyers – interest rates are not as high as they have been historically. But rates are higher than the rock bottom we have had available for the past several years. We don’t see any sign of homes losing crash like values. The market is normal.
- Homes are selling, but not as fast and price reduction on listings means that pricing matters.
- Sellers are competing now with other sellers. Condition matters.
Buyers are still paying record high prices for a home so – Price and Condition matters.
- High interest rate example of the same home:
- last year a $600,000 home if purchased using a conventional loan with 20% down had a monthly payment of $ $2,484. This year the same home at the same price will have a monthly payment of $3,111.
Note to sellers – Buyers know how the interest rate will impact their quality of life and feel the level of financial commitment. Sellers must be aware of how interest rates affect buyers and price accordingly.
One day on….next day off.
In short: The sky is not falling but the covid rush era is over. The interest rate market has begun. Sellers need to be aware that market values are high so it is a good time to sell AND sellers must embrace that the market is NOW heavily influenced by the buyer.
