Sedona, AZ: "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). 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 vulnerable 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 Weekend) 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.
