The Moulton Sarasota Real Estate Report – November 2017
If We Had a 2018 Crystal Ball What Might it Tell Us?
The 2017 Sarasota Real Estate Market appears to be on track to exceed prior year sales by as much as 10% if pending sales in October and November close as expected. With another leap in contracts signed but not yet closed in December, it seems the region is well positioned to maintain its healthy expansion into 2018.
A stabilized market for an extended period signals that we are no longer in a market recovery. Instead the Sarasota Real Estate Market is vibrant yet controlled, vigorous but without signs of fragility, and flourishing due to a number of hyper-local as well as national and global effects. Completely different from the ride up to the market crash, consistent improvement without the toxic market volatility has placed us in a position to allow for steady growth.
Economists and market experts are in agreement that sales, prices and new construction are all expected to grow in the coming year. What is influencing the positive outlooks? Nothing that we haven’t reported in this monthly report throughout the year…but all worth mentioning again as we prepare to enter a New Year.
- Interest rates are expected to remain at historically low levels. There are conflicting opinions on whether there will be three or four fed rate hikes, but none believe rates will reach 5% at least before the end of next year.
- Unemployment rates are at a 17-year low and wages are rising giving eager homebuyers the confidence to take the plunge.
- The country’s economic growth is spurring consumer confidence, which in turn fuels the real estate market.
- Household wealth has expanded in part due to the healthy real estate market, but also the surging stock market and personal investments, building homeowner equity and available funds for real estate investment.
- A large new generation of millennials is moving from rental to homeownership. They are expected to absorb considerable inventory of new and existing homes.
- Reticent sellers afraid they couldn’t find their “move-up” dream are expected to finally list their properties, as a vast number of new homes will become available and recently updated and modernized existing homes come to market.
A recent survey by the National Association of Realtors found that the number of homeowners believing that now is a good time to sell is 14% higher than this time last year. Though we hoped the Sarasota Real Estate Market would have seen more easing of tight inventories in certain prized locations and price-points, the listings activity did not yet bring us to six-month supply, which is considered a well-balanced market.
Despite still being in a seller’s market (and expected to stay that way at least for the first half of the year,) and with an average sale at 95% of list price, buyers are optimistic. The volume of calls that I am receiving from sellers who had hesitated listing their properties is high, so I see improving inventory conditions ahead.
Prices this year across the country have grown 5-6%. In the Sarasota Real Estate Market we have seen several months of double-digit year-over-year growth, mostly a result of tight inventories. As our listings grow, price appreciation is likely to soften a bit, further reinforcing market stability.
Homebuilders learned some tough lessons in the real estate market crash as they were left with loads of excess inventory and undeveloped land. Though homebuilder confidence is nearly at an all-time high, the business model has turned from who can have the biggest market share, to profitability and balance sheet fortitude.
While builders have yet to meet demand, the pipeline is encouraging and pacing ahead of prior year production. Concerns for too few “starter homes” and affordable options are expected to persist, as there is just too much demand for builders in the mid-market and luxury new homes.
My crystal ball is obviously telling me that, without considerable unforeseen disruptive events, we are headed for another stellar year in the Sarasota Real Estate Market!
But 2017 isn’t over yet! Following are the results of the busy November Sarasota Real Estate Market and comps to some state and national data. Based on the strong activity in November and continuing growth in pending contracts signed in the month, I see this year ending with healthy growth of sales and median prices, along with moderate volume of new listings and a local market primed for a Happy New Year!
Sales:
- Total Sarasota Real Estate Market dollar volume of $387.8 million in November increased $118.8 million from prior year and increased $73.6 million over the prior month.
- Broken down, single-family dollar volume increased 45% compared to prior year and condos sales dollar volume was up 92.7%.
- The number of properties sold in November including both single family and condominiums was 874 which was 20 more than October and 48 more than a year ago.
- Single-family home sales fell by 3.3% in November, but condo sales saw a remarkable 26% growth, much as a result of the new bayfront The Vue project completion.
- Florida’s single-family grew by 1.3% and condos were 5.8% higher than November 2016.
- U.S. sales were at the highest sales pace since December of 2006. Single-family grew by 3.2% and condos by 7.5%.
- The 2017 monthly average of total sales is 979 vs last year the monthly average was 952, a similar monthly pace.
- Of the closed sales 84 were for over $1,000,000 or 10%. 34 were houses and 50 were condominiums.
- In the $600,000 and higher price point, single-family sales grew 40% and condos priced over $600,000 were 335% greater than prior year!
- 165 closed sales were sold between $400,000 and $1,000,000 or 19%.
- 71% of the closed sales were under $400,000.
- All cash sales in Sarasota continue to be strong with 36% of single-family and 68% of condo sales closed without a mortgage. This percentage consistently exceeds trends for Florida and national cash sales (22% in November.)
- Total pending sales of 940 properties that went under contract during November increased by 133 from the same month last year, a 16.5% increase. The largest segment of growth was condominiums, which may also be attributed to pending closings in the large nearly sold-out Vue project.
- U.S. pended sales for all housing types grew by just .8% compared to prior year.
- Florida’s total pending sales were 6.6% higher than last year.
- The monthly average of total pending sales this year is 1,545 vs. 1,540 in 2016.
Prices:
- In November, Sarasota’s single-family homes were sold at a median price of $285,000 vs. $265,000 a year ago, 7.5% higher.
- Florida median price for single-family homes was $240,000, a 9.1% increase over last year.
- The national median price for existing homes grew by 5.4% to $248,800.
- The median price in November for a NEW home in the U.S. was $318,700.
- The 2017 monthly median price average for houses sold in Sarasota was $266,320 vs. $249,943 last year.
- Condominium median sale price was $240,000 in November vs. $207,770 in 2016.
- The 2017 monthly median average is $223,365 vs. $208,539 in 2016.
- Median price for a Florida condo last month was $176,000 an 8.6% increase over November 2016.
- U.S. median condo price grew 8.8% in November to $242,500.
- The average sale price for houses in Sarasota was $414,368 in November vs. $350,103 a year ago.
- The year’s monthly average price for houses sold is $369,627 vs. $346,232 last year.
- Sarasota’s condominiums sold for an average price in November of $493,125 vs. $322,414 a year ago. A contributing factor to this growth is the closing of numerous new construction luxury residences at The Vue. In fact, condo sales for units above $600,000 were 335% higher than prior year, strongly impacted by the same project.
- The 2017 monthly average price for sold condominiums is $351,663 vs. $325,802 last year.
- Single-family homes sold at 95.3% of list price, and condominiums sold at 95.7% of the list price. The year to date average for all properties sold is 94.8%.
Inventory:
- Total available inventory in the Sarasota Real Estate Market has increased by 287 listed properties from October, as there typically is an increase as fall approaches.
- Since January 1, 2017, inventory has fallen by 249 properties or 5%.
- Currently there is available inventory of 4,356 properties for sale vs. 4,595 at the end of 2016 and 3,598 at the end of 2015.
- There are currently 7.3% fewer single-family homes on the market in the over $1 Million price point than there were in November 2016, and condos in the same luxury level have 12% fewer units to choose from than last year.
- The Realtor Association of Sarasota-Manatee reports that there are 4.1 months of single-family homes inventory and 5.2 month’s supply of condominiums, both under the 6-month level considered a balanced market.
- Florida currently has 3.8 months of single-family inventory and 5.7 months of condominiums.
- U.S. inventory of all housing types is reported to be at 3.4 months, 9.7% less than a year ago.
- Sarasota County is averaging 1,254 new listings per month and in 2016 it was 1,259, virtually identical.
- Of the total new listings the past month 9.6% or 133 properties were listed over $1,000,000.
- 25% or 349 new listings the past month were listed for between $400,000 and $600,000.
- 65% of the month’s new listings were listed for under $400,000.
As we near the end of 2017, I continue to be bullish on the outlook for the Sarasota Real Estate Market. The active buyers looking at our spectacular region, growing availability of inventory in desirable locales and price points, along with the great stability of our market conditions support the confidence that I have.
If you have been considering listing your property, I cannot express how strongly I feel that entering the marketplace at this time of year is most advantageous in that you’re capturing the greatest number of eyes during peak season.
At the same time, if you are a buyer, with prices expected to maintain a healthy pace of appreciation, interest rates set to increase and inventories anticipated to grown only gradually, now is a prime time to select something from the beautiful properties we currently have available in the region.
Seller or buyer, I am eager to assist you in achieving your desired outcomes! Don’t hesitate to call to share your goals and I will help you to determine the best plan for your unique needs.
Wishing you good health, abundant happiness, peace and prosperity in 2018!
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