Updated on December 1, 2016
2007 Market Update
I really did not want to write another issue about our area real estate market, but I wanted to let you all know that we are actually seeing the very first signs of a recovery in our area. Now, before I go and get everyone excited, allow me to say this: the recent changes may just be a fluke, an aberration and may simply be attributed to the time of year (winter visitors, holidays), but whatever the reason, real estate sales activity is FINALLY picking up.
Just how bad was this past year? Ask just about any agent in our area! In 2005, at the height of our market, there were 977 agents in our local association. We are now at 834 agents. 143 agents have left this business since the height of our real estate market. Sedona Verde Valley Association of Realtors sales statistics for agents in our area look something like this for 2007, year to date.
# of agents who have not had a single sale ALL YEAR in our MLS in 2007, YTD- 306
# of agents who have sold only 1 property this year- 112
# of agents who have only sold 2 properties this year- 104
# of agents who have only sold 3 properties this year- 60
# of agents who have only sold 6 or less properties this year – 705
# of agents that sold less than 1 million in total transactions so far this year- 583
# of agents that have sold less than 2 million in total transactions this year- 709
# of agents who have sold 11 or more properties this year- 63
# of agents who have sold 20 or more properties this year- 11. Fortunately, this is the category Ken and I fall into for this year…but we had to work 3 times as hard to make it happen. So if we look dog tired…we are!
If we figure that the average commission paid was 3% per agent and that the typical split with their broker was 80%, well over half of the agents in our association have made less than 24,000 this year selling real estate, BEFORE EXPENSES! Certainly doesn’t seem like a very glamorous business, does it? We can certainly expect that many more agents will be getting out of the business…if they can make more money at Home Depot, why wouldn’t they?
I have heard a rumor that our association is already planning our 2008 budget to have 150 or so less agents. I have a feeling that number may be much higher if a shift in activity does not occur VERY soon. And unfortunately, we are already losing GOOD reputable agents…either via economic forces or as a result of overall negativity in the market. I had told someone over the summer that I was surprised I am not wearing much smaller pants this year, after all the various people who have taken a chunk out of my posterior this year! Buyers are unhappy because they wonder if they paid too much… and sellers are unhappy because they could of gotten so much more…. Agents are the messengers of market conditions….And we all know who is the first to get shot! It has been really, really ugly out there overall.
So… if you know a few of the GOOD REALTORS in our area, give them ALL a call and say “Hi,” or “Thank You”…write them a letter of recommendation, if they have done a good job for you in the past. Let them know that you are trying to refer business to him or her, or that you are planning to sell or buy soon and that you plan on using him or her as your agent. Little bits of encouragement at such a difficult time like this can mean the world! Tell your friends, business acquaintances and family members who may be interested in buying or selling that you know a great agent they should call…..Kind words or referrals from a former or future client will mean the world right now to any agent battling this market, and your efforts may just help keep a few more good agents in this business!
THE GOOD NEWS- Inventory seems to be stabilizing, and has even dropped about 1%. In the September market update, I had told you that the number of active listings was 3024. That number had increased to over 3170 listings, and today, we have a total of 3130 active listings available via the Sedona Verde Valley Multiple Listing Service. But what makes me think we maybe seeing a slight turn of the tide is the fact that the number of pending sales is picking up and our office, which has felt more like a graveyard than a real estate office since mid-summer, is now coming alive again with the hustle and bustle of buyer traffic. Our office is not the only office experiencing a recent pick up…it appears to be market wide. The worst may be over, or it may be simply a function of the time of year. The drop in number of listings may simply be people pulling their properties off the market for the holidays, hoping to try again in the spring. The recent influx of area buyer activity may be due to our winter visitors, who start streaming in a few weeks before the holidays. The good news is, many will come and go in the next few months, and some will most definitely purchase property before returning home!!!!
In a few more weeks, I will be attending the annual market forecast seminar for 2008, hosted by Renowned Arizona Economist, Elliot Pollack. Maybe he, and other industry leaders can offer us some additional good news about the prospects for 2008. Until then, have a truly wonderful Thanksgiving. Be thankful for your health, the love of your family and friends and all the other things that truly matter in life. The market is merely in a cycle, and good times lie ahead,…. adversity can only make us stronger. Holly Grigaitis-Svercl and Ken Svercl, Mingus Mountain Real Estate 928-300-5228 email@example.com