In 2021 we saw some changes to the luxury real estate market. Some things we have NEVER seen before.
First, for clarity’s-sake, what is a Sedona luxury home? They’re the homes that represent the top 5% – 10% of the market value. We have approximately 5,000 homes in Sedona, so that would be the top 500 homes.
In 2021, luxury home prices started at $2.5M – $3M and quickly went up from there. These are the homes that are constructed and finished with high-end materials, typically designed with uncommon architectural details and they have exceptional amenities.
In 2021, we saw something completely new. The luxury homes sold quickly. Exceptions to this with longer listing times were: aggressively overpriced luxury homes, $500K or $1M overpriced, and major problems (especially issues under the surface).
Another exception is significant stairs. This is a bit more common because many luxury homes are built right on clifftops/hilltops, to maximize their views. Some of these homes have 20 or 30 stairs just to get to the front door. That’s a real problem for most luxury homeowners because most are over the age of 60 and the stairs are taxing on the body.
Aside from those exceptions, selling luxury homes no longer requires underpricing or significant time on market. The average time on market for luxury homes as of 2021 is approx 1 week. Pre-2021, it was four to six weeks. Sure, you would see some luxury properties sell quickly, but there were also a lot of properties that were taking 3, 6, or even 12 months to sell. This is no longer the case. This is due to scarce inventory and more qualified buyers than ever.
The forecast for 2022 is an uptrend in the sellers’ market with aggressively driven appreciation.
This is good news for sellers. However, it’s going to be more challenging for buyers. The pre-luxury homes, currently priced around $1.5 million are going to start pushing to that $2M – $2.5M price point. At end of 2022, it’s going to push the starting point of luxury homes closer to $3 million+. We are going to continue to see low active time on the MLS market. That one-week average is probably going to drop to closer to about five days on market. We’re going to see more inventory hit the MLS around March/April, and then through the summer and the fall. The problem for buyers is that we’re going to be seeing continued increased popularity towards buying in Sedona throughout 2022, as well. We had double or even triple the number of buyers by the end of this year, 2021 that we had in March 2021. We will likely experience the same thing in 2022. This is going to significantly impact the luxury market, driving prices and generating bidding wars.
The buyer ferocity will outpace new seasonal inventory.
So for buyers, “Sorry”, it’s going to be frustrating. For sellers, it’s phenomenal. And again, for luxury homes, the appreciation is going to be hard-driven. Price points will get a big boost.
If you have more questions, reach out and schedule a call. Whether you’re buying or selling, we look forward to meeting with you.