WHATS THE SEDONA REAL ESTATE MARKET DOING?

WHATS THE SEDONA REAL ESTATE MARKET DOING? That is the question on everyone s lips these days. Everyone wants to know what is the market doing. Why, because it matters to all of us. We are either living in a home that we are buying, or God forbid we own outright, or we are renting. All of us are tied up in the market one way or another. Owners want to know what the value of their home is doing and if you are renting you want to know if your rent might go up, or if prices are going up fast enough to tempt your landlord into putting your home on the market, or is it time to get in the home ownership game. So what is the market doing? Right now, steady as she goes in the Sedona area anyway. For the last three years we seemed to have settled down into a range of 4 single family transactions a year and prices have stabilized at around $34, for the median sales price of a single family home. Some good news, that is up 2% year over year, not much, but up. Better than what has happened year over year since 27. Yes 27, prices have been on a decline since 27. I think we can safely say that the decline in home prices is over, barring some sort of worldwide calamity that we do not have control over. I know some of you think I am wrong, and you all have your reasons why, but I think I am right and I am the one in front of my keyboard. We are staged to see prices rise in the Sedona market. The number one reason is that real estate inventory, the number of homes available for sale, is getting critically (if you are a buyer) low. Residential inventory is not only low in the Sedona area it is low all over the country. As of this writing we have 42 residential properties on the market compared to September of 28 when there was 725 homes on the market, a 43% decline and 18% less homes on the market than September of 26 when prices were at their peak. I have been asking myself why inventory has been on this decline over the last several months. Here are my thoughts. Since this real estate recession has been in full swing we have seen a significant number of home owners forced to sell through foreclosure and short sale. Since the Sedona Verde Valley Association of Realtors (SVVAR) started keeping track of foreclosures and short sales in the Sedona are there have been 653 residential sales that were foreclosed or short sales. I am kinda stunned by the sheer volume. The number for the entire Verde Valley is a whopping 2,45 transactions. That does not include those investors, and there have been quite a few of them, that have bought homes on the courthouse steps, fixed them up and resold them. Add to that those sellers that bit the bullet and sold in the declining market. What we have left is home owners that do not have any interest in selling and those home owners that are not going to sell at these low prices because they want more equity or homeowners that need prices to go up so that they are not underwater when they sell. So back to why prices are not going to decline any more: we have a inventory shortage, supply and demand. There are less and less distressed homes impacting the market. In Sedona

distressed inventory is at its lowest point in three years. Interest rates are at historic lows and will stay low for the next couple of years. The feeder markets for Sedona: California and the upper Midwest, are showing the same signs of recovery providing fuel, buyers, for our market. Prices will rise, not fast, but they will rise. There I have said it. Time will tell, hindsight is 2/2 but that is how I see it, so to speak. Now for just the facts: Sedona Area: Single family median sales price for the last 12 months is at $339,9 up 2% from the previous 12 month period. There were 31 single family transactions for the first 9 months of 212, compared to 37 in 21 and 38 in 211. Median sales price in the first 9 months of the year is at $339,95, right in line with the last 12 month number at $339,9. Single family transactions for the last 12 months is at 389, down 6% from the previous 12 month period. I believe the lack of inventory has a part to play in that number being lower. Buyers cannot find what they want. Vacant land transactions are at 112 for the last 12 months up 15% from the previous year, still very weak. Vacant land median sales price for the last 12 months is at $115,, down an additional 8% from the previous year in spite of the increase in the number of sales. The luxury market, over $1,,, has settled in to the range of 2 sales per year with 18 in the last 12 months. Luxury home inventory continues to decline with only 6 homes over $1,, on the market compared to 146 in the second quarter of 28. Cumulative days on the market fell to 151 days from 16 for the previous 12 month period and down 32 days from the recent peak in 28 29 The median sales price for Condos and Townhomes fell to $212,5 for the last 12 months down 8% in spite of the dramatic increase in the number of transactions which rose to 9 transactions up 63% from the previous 12 month period. On the positive side for the first 9 months of 212 the median sales price for condos and townhomes in the Sedona area rose to $22, up 1% over the first 9 months of 211 with a spike in the number of sales to 73 up 87% over the first 9 months of 211.

The medians sales price of mobile homes and manufactured homes rose to $135, up 28% from the previous 12 months. Number of transactions fell to 27 down 23% from the previous 12 month period, mostly dues to the acute shortage of inventory. Camp Verde: The median sales price for single family homes rose to $129, up over 3% over the last 12 month period with 112 transactions. For the first 9 months of 212 the median sales price for single family homes is at $134,45, up 8.5% over the first nine months of 211. Good news for Camp Verde. Lake Montezuma and Rimrock: The median sales price for single family homes for the last 12 months is at $9,5, up 14.5% over the previous 12 months. There were 9 transactions up 34% from the previous 12 months. For the first 9 months of the year the median sales price is at $97, up 18% from the first 9 months of 211. Numbers of transactions is at 65, up 22% from the first 9 months of 211. Cottonwood and Cornville: The median sales price for single family homes rose to $138,5 up 6.5% compared to the previous 12 month period. Number of transactions for the last 12 months was at 525, up slightly over the previous 12 month period The median sales price for single family homes in the first 9 months of 212 rose to $14, up 12% over the first 9 months of 211 on 389 transactions. Yavapai County: Notice of Trustees sales continues to fall with 158 notices recorded in September, the lowest number in over 4.5 years. Bottom Line: In areas of the Verde Valley for the first 9 months of 212 the markets are up compared to 211. The lack of inventory is going to have an impact on prices for the rest of the fall season and into the spring in Sedona and the Verde Valley. Homes coming on the market in tip top shape and well priced are at a premium and will be bought up quickly. Interest rates are going to stay at historic low rates over the upcoming months. Until we see a further increase in prices we can expect inventory to stay tight as sellers hold out for those higher prices.

October 212 YTD Verde Valley Residential Sold vs Active.xls Price Range Rimrock Sedona Cottonwood Camp Verde Lake Montezuma Verde Valley Sold Active Sold Active Sold Active Sold Active Sold Active - 199K 74 53 382 182 99 71 73 6 628 366 2K - 299K 116 56 57 51 18 25 3 4 194 136 3K - 399K 81 88 18 17 3 8 2 2 14 115 4K - 499K 54 65 3 9 3 8 1 61 82 5K - 749K 5 69 5 9 6 55 84 75K - 999K 11 29 9 1 3 12 41 1 Mil - 1.49 Mil 1 3 1 4 11 34 1.5 Mil - 1.99 Mil 4 13 2 4 15 2 Mil - 2.49 Mil 2 5 1 2 6 2.5 Mil & Over 1 12 1 1 13 Sold vs Active - 499,999 325 262 46 259 123 112 79 66 987 699 Sold vs. Active 5K - 999,999 61 98 5 18 1 9 67 125 Sold vs Active 1 Mil & Over 17 6 2 1 6 18 68 Totals 43 42 465 279 125 127 79 66 172 892 Provided Courtesy of Randy Crewse Data Source: SVVAR MLS as of October 3, 212 4 Provided Courtesy of Randy Crewse

October 212 YTD Verde Valley Vacant Land Sold vs Active.xls Price Range Rimrock Lake Sedona Cottonwood Camp Verde Montezuma Verde Valley Sold Active Sold Active Sold Active Sold Active Sold Active - 99K 36 43 28 234 1 96 16 121 9 494 1K - 199K 36 123 3 98 3 2 1 6 43 247 2K - 299K 12 73 18 6 1 12 98 3K - 399K 4 28 8 3 1 4 4 4K - 499K 1 22 6 2 2 1 32 5K - 749K 1 16 4 2 1 22 75K - 999K 16 4 2 1 Mil - 1.49 Mil 3 1 1 5 1.5 Mil - 1.99 Mil 5 5 1 1 12 2 Mil - 2.49 Mil 1 1 2.5 Mil & Over 3 5 8 Sold vs Active - 499,999 89 289 31 364 13 127 17 131 15 911 Sold vs. Active 5K - 999,999 1 32 8 2 1 42 Sold vs Active 1 Mil & Over 12 11 2 1 26 Totals 9 333 31 383 13 131 17 132 151 979 Provided Courtesy of Randy Crewse Data Source: SVVAR MLS as of October 3, 212 5 Provided Courtesy of Randy Crewse

$7, Median Price Single Family Sedona Area October to September 24-212 $6, $58, $575, $5, $51, $5, $4, $42, $38, $333, $339,9 $3, $2, $1, $ 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 6 Provided Courtesy of Randy Crewse

7 Single Family Transactions Sedona Area October to September 212 6 64 5 4 417 43 415 389 3 279 31 223 2 1 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 7 Provided Courtesy of Randy Crewse

4 374 Vacant Land Transactions Sedona Area October to September 24-212 35 3 25 2 161 15 1 7 59 82 13 97 112 5 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 8 Provided Courtesy of Randy Crewse

6 Median Sales Price Vacant Land Sedona Area October to September 24-212 $515, 5 4 $35, $353,5 $345, 3 2 $167,5 $15, $126, $115, 1 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 9 Provided Courtesy of Randy Crewse

2 Verde Valley Residential Inventory 18 16 14 12 1747 1668 1676 1682 1663 1668 1611 1558 1599 1548 1415 146 1482 1478 1512 1389 143 1365 1322 1282 13 12721266 1239 18 1172 187 1169 1 957 943 949 931 924 892 8 6 4 2 1 Provided Courtesy of Randy Crewse

8 7 6 5 Sedona Residential Inventory 725 715 74 7 75 689 679 676 681 666 625 64 624 67 597 592 589 595 584 573 566 554 511 518 53 525 51 486 453 452 466 447 423 42 4 3 2 1 11 Provided Courtesy of Randy Crewse

16 14 1399 1394 13431341 1354 1317 1295 Verde Valley Vacant Land Inventory 1465 1371 1382 1393 1338 1347 1354 1327 12 1147 199 1111 1154 1137 189 193 153 144 111 118 1 932 976 893 958 979 822 8 6 4 2 May Sept Nov 6 6 6 Jan 7 April June Aug Sept Nov 7 7 7 7 7 Jan 8 Mar 8 May 8 July 8 Sept 8 Nov 8 Jan 9 April June Aug Nov 9 9 9 9 May 1 June Sept Oct 1 1 1 Jan 11 April 11 July 11 Oct 11 Jan 12 April 12 July 12 Oct 12 12 Provided Courtesy of Randy Crewse

6 Sedona Vacant Land Inventory 5 4 339 382 39 377 413 43 428 434 465 422 456 457 41 433 47 464 481 495 498 45 424 442 427 388 335 355 365 375 393 361 34 333 3 2 1 13 Provided Courtesy of Randy Crewse

6 Single Family Transactions Above $1,, Sedona Area October to September 24-212 55 5 49 49 4 3 24 21 2 18 17 18 1 24-25 26 26-27 27-28 28-29 29-21 21-211 211-212 14 Provided Courtesy of Randy Crewse

16 Single Family Listing Inventory Over $1,, Sedona area 26 to 212 146 14 12 13 17 11 119 132 126 115 121 129 117 123 16 1 89 94 94 87 93 8 6 78 64 68 7 75 63 69 68 6 4 2 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 26 26 26 26 27 27 27 27 28 28 28 28 29 29 29 29 21 21 21 21 211 211 211 211 212 212 212 15 Provided Courtesy of Randy Crewse

6 Single Family Transactions Sedona Area First Nine Months of Year 5 466 479 4 3 314 37 38 31 248 2 27 176 1 24 25 26 27 28 29 21 211 212 16 Provided Courtesy of Randy Crewse

$7, Median Sales Price Single Family Sedona Area First Nine Months of Year $6, $597,4 $57, $5, $522, $498,5 $4, $4, $46, $385, $351,278 $339,95 $3, $2, $1, $ 24 25 26 27 28 29 21 211 212 17 Provided Courtesy of Randy Crewse

4 356 35 337 338 321 317 3 25 Sedona Single Family Inventory 2 Sedona Single Family Inventory Under Contract Sedona Single Family Distressed Inventory 15 Sedona Single Family Distressed Inventory under Contract 1 82 5 49 33 56 6 55 5 41 4 37 35 24 19 21 2 May 212 June 212 July 212 August 212 Oct 212 18 Provided Courtesy of Randy Crewse

Yavapai County Notice of Trustees Sales (Foreclosures Initiated) 45 4 4 4 35 3 29 353 361 297 332 288 334 322 35 28 38 356 33 36 33 279 288 26 281 26 263 25 2 211 186 237 24 243 232 238 217 233 221 27 188 225 23 22 214 217 239 221 23 189 169 158 15 1 5 Jan 8 Mar 8 May 8 July 8 Sept 8 Nov 8 Jan 9 Mar 9 May 9 July 9 Sept 9 Nov 9 Dec 9 Jan 1 Feb 1 Mar 1 April 1 May 1 June 1 July 1 Aug 1 Sept 1 Oct 1 Nov 1 Dec 1 Jan 11 Feb 11 March 11 April 11 May 11 June 11 July 11 Aug 11 Sept 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 April 12 May 12 June 12 July 12 Aug 12 Sept 12 19 Provided Courtesy of Randy Crewse

45 Annual Notice of Trustees Sales in Yavapai County (Foreclosures) 4223 4 373 35 3 286 2721 2616 25 2 15 1333 1 933 9 847 5 572 575 22 23 24 25 26 27 28 29 21 211 Est 212 2 Provided Courtesy of Randy Crewse

2 18 Cumulative Median Days on Market for Single Family Sedona Area October to September 24-212 183 16 157 163 16 151 14 137 12 1 1 8 65 6 4 2 24-25 25-25 26-27 27-28 28-29 29-21 21-211 211-212 21 Provided Courtesy of Randy Crewse

$3, Median Price Single Family Camp Verde Area October to September 24-212 $285, $25, $243, $249,5 $21, $2, $16,75 $15, $139, $124,925 $129, $1, $5, $ 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 22 Provided Courtesy of Randy Crewse

14 129 Single Family Transactions Camp Verde Area July to June 24-212 12 114 112 1 13 13 8 76 77 6 55 4 2 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 23 Provided Courtesy of Randy Crewse

12 Single Family Transactions Camp Verde Area First Nine Months of Year 1 1 11 8 81 82 84 7 6 53 6 4 39 2 24 25 26 27 28 29 21 211 212 24 Provided Courtesy of Randy Crewse

$3, Median Sales Price Single Family Camp Verde Area For The First Nine Months of Year $281,9 $259, $25, $235, $21, $2, $15, $159, $151,5 $136,5 $123,95 $134,45 $1, $5, $ 24 25 26 27 28 29 21 211 212 25 Provided Courtesy of Randy Crewse

12 Single Family Transactions Lake Montezuma and Rimrock October to September 24-212 17 1 88 87 9 8 67 6 55 46 4 34 2 24-25 25-26 26-27 27-28 28-28 29-21 21-211 211-212 26 Provided Courtesy of Randy Crewse

$25, Median Sales Price Single Family Lake Montezuma and Rimrock October to September 24-212 $219,95 $215,9 $2, $174, $177,5 $15, $13, $16, $1, $79, $9,5 $5, $ 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 27 Provided Courtesy of Randy Crewse

$25, Median Sales Price Single Family Lake Montezuma and Rimrock First Nine Months of Year $221,5 $22, $2, $179,9 $165, $15, $141,181 $13, $1, $12, $97, $81,9 $5, $ 24 25 26 27 28 29 21 211 212 28 Provided Courtesy of Randy Crewse

9 8 79 Single Family Transactions Lake Montezuma and Rimrock First Nine Months Of The Year 82 7 65 65 6 5 57 53 42 4 37 3 26 2 1 24 25 26 27 28 29 21 211 212 29 Provided Courtesy of Randy Crewse

$3, Median Price Single Family Cottonwood - Cornville Areas October to September 24-212 $257,75 $259,9 $25, $229,95 $225, $2, $175, $15, $15, $13, $138,5 $1, $5, $ 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 3 Provided Courtesy of Randy Crewse

8 Single Family Transactions Cottonwood - Cornville Areas October to September 24-212 7 696 6 5 482 449 51 525 4 394 344 3 266 2 1 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 31 Provided Courtesy of Randy Crewse

7 Single Family Transactions Cottonwood - Cornville Areas First Nine Months of Year 6 586 526 5 4 353 349 383 389 3 297 272 2 25 1 24 25 26 27 28 29 21 211 212 32 Provided Courtesy of Randy Crewse

$3, Median Sales Price Single Family Cottonwood - Cornville Areas First Nine Months of Year $25, $24, $255, $259,9 $219,5 $2, $184,9 $174, $15, $148, $14, $125, $1, $5, $ 24 25 26 27 28 29 21 211 212 33 Provided Courtesy of Randy Crewse

$4, Median Price Condos and Townhomes Sedona Area October to September 24-212 $375,25 $36, $35, $3, $3,5 $295, $283,5 $25, $248, $23,1 $212,5 $2, $15, $1, $5, $ 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 34 Provided Courtesy of Randy Crewse

12 112 Condos and Townhomes Transactions Sedona Area July to June 24-212 1 88 9 8 74 78 6 54 58 55 4 2 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 35 Provided Courtesy of Randy Crewse

12 Condo and Townhome Transactions Sedona Area First Nine Months of Year 1 98 84 8 73 6 61 6 4 48 43 45 39 2 24 25 26 27 28 29 21 211 212 36 Provided Courtesy of Randy Crewse

$45, Median Sales Price Condos and Townhomes Sedona Area First Nine Months of Year $4, $45, $362,5 $35, $3, $276, $37,45 $33, $285, $25, $252,5 $22, $2, $2, $15, $1, $5, $ 24 25 26 27 28 29 21 211 212 37 Provided Courtesy of Randy Crewse

$3, Median Sales Price Manufactured and Mobile Homes Sedona Area October to September 24-212 $276, $25, $24, $223,38 $2, $187, $196, $15, $147,5 $135, $1, $15, $5, $ 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 38 Provided Courtesy of Randy Crewse

6 Manufacured and Home Homes Transactions Sedona Area October to September 24-212 54 5 42 4 37 31 3 26 24 27 2 17 1 24-25 25-26 26-27 27-28 28-29 29-21 21-211 211-212 39 Provided Courtesy of Randy Crewse

14 12 1 1156 118 1171 1136 1119 117 171 17 179 138 15 996 966 118 9 889 824 827 8 6 756 75 723 693 Verde Valley Single Family Foreclosed and Short Sale Listings Verde Valley Single Family Listings 4 2 22 242 259 276 271 274 281 265 284 274 285 279 281 34 265 271 214 239 197 186 172 156 4 Provided Courtesy of Randy Crewse

14 12 118 114 117 1 8 6 4 55 87 82 74 67 66 64 53 52 52 43 4 41 37 34 34 27 24 23 11 93 91 85 86 76 75 7 6766 52 53 55 46 47 46 4 36 37 95 52 6 18 17 13 13 1 11 1 99 88 86 85 79 78 78 73 74 55 5 45 44 45 45 43 38 39 39 37 34 32 29 29 27 Verde Valley Single Family Foreclosed/Short Sales Solds Verde Valley Single Family Total Solds 2 12 12 Sept 8 Nov 8 Dec 8 Feb 9 Mar 9 May 9 July 9 Sept 9 Nov 9 Jan 1 Mar 1 May 1 July 1 Aug 1 Sept 1 Oct 1 Nov 1 Dec 1 Jan 11 Feb 11 March 11 April 11 May 11 June 11 July 11 Aug 11 Sept 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 April 12 May 12 June 12 July 12 Aug 12 Sept 12 41 Provided Courtesy of Randy Crewse