December 6th, 2011

There is a significant decline in number of distressed properties in Sedona at this time.  We have about half of the number of distressed properties on the market now than a year or so ago.

We have no way to know what is in the wings (shadow inventory of REOs and Short Sales) but these properties are what keeps the prices down for sellers who own their home, and also prices lower for those who are looking to buy.

As these properties become sold, gradually prices start to gradually increase. As interest rates increase, the combination will require that many move to a lower price bracket because of the combination of these effects.

This is of course all speculation.

Because we have an absorption rate which is very high (meaning in each category proportionately inventory to last anywhere from 4 months at low end to a couple of years at high end) ....and currently a low interest rate, this is probably one of the best times in our history for the past many decades to purchase a home as an investment.

It will be a while before prices start to rise significantly, so plan to keep your investment for a number of years to see a good financial gain.

But if you chose to sell, there will always be people moving around, or leaving a community for a reason, and wanting to move to some specific place, so houses are always being bought and sold.   If you have a good property management company where you are, renting until the market heats up again is an option for some.   But for others don't want the worry and hassle of property management, should you sell during a soft market, you will gain on your purchase on the other end by getting in at the bottom of the market.

In any event, real estate is always an excellent investment.   

And ... you can enjoy the pleasure of living in your investment!