Hi Everyone,

There’s a major development unfolding in the Village of Oak Creek that could have a noticeable impact on our local real estate market. It’s something buyers, sellers, investors, and homeowners should all be paying attention to.

At the April 18th Annual Meeting, the Village of Oak Creek Association (VOCA) announced that after extensive consultation with multiple legal experts, their 2016 amendment restricting rentals to a 30-day minimum has been determined to be void and unenforceable.

This is significant because VOCA encompasses a large portion of the Village of Oak Creek.

That said, several sub-associations within VOCA  have their own CC&Rs and rental policies that may still apply independently.

So what could this mean for the market?

Potentially… a lot.

The City of Sedona currently has approximately 1,266 registered short-term rentals. Back in 2019, there were only about 625. That explosive growth has already changed the rental landscape dramatically. While many owners experienced exceptional rental performance during and shortly after the pandemic boom, vacancy rates today are not what they were in 2021. Many investors are discovering that short-term rentals are not producing the returns they initially expected.

Now, with the Village of Oak Creek potentially opening the door to many more short-term rentals, the number of STRs in the Village could easily double over time.

Another factor that may attract investors is taxes. STR's within Sedona city limits are currently subject to a combined short-term rental tax rate of 9.825%, while properties in the Village of Oak Creek which are outside Sedona city limits are taxed only at the county rate of  6.325%. That difference alone could make The Village properties more appealing to investors and second-home buyers.

But here’s the big question:
Will this increase property values in The Village… or will it simply over saturate the short-term rental market?

At this point, nobody knows for certain.

Sedona attracts more than 5.7 million visitors annually, so demand for vacation accommodations remains strong. However, the market is maturing, and buyers are becoming more strategic. The reality is that Sedona short-term rentals are rarely a “get rich quick” strategy. 

Where they can make sense is for buyers looking for a vacation home they can personally enjoy while offsetting expenses through occasional rental income. For many owners, rental income helps cover mortgage payments, taxes, maintenance, and other carrying costs while the property continues to appreciate over time. There can also be potential tax advantages depending on individual circumstances.

For some buyers, long-term rentals may ultimately make even more financial sense. Because many long-term rentals were converted to short-term after the pandemic, there is a demand for them making rents go up.

Every buyer’s goals are different, and this changing landscape makes it more important than ever to understand all the options before making a move.

If you’re curious how this could affect your property value, investment plans, or future buying opportunities in Sedona or the Village of Oak Creek, I’d be happy to help you navigate the pros, cons, and possibilities. I've watched many changes over the past 25 years, but what remains constant is that Sedona is a beautiful place to live.  I count my blessings every day!

Warmly,
Kathy Cox