The Moulton Sarasota Real Estate Report – May 2016
Prices and Inventory Fired up for Summer Selling Season
The Sarasota Real Estate Market summer selling season is primed with inventory for the traditional busy months of July and August. With new listings of existing homes and condominiums across nearly all price tiers showing adequate replacement of sold properties, it appears that there is stabilization, which will likely help to moderate escalating prices.
The strong price performance in the Sarasota Real Estate Market indicates a continued “seller’s market” with inventory below what is considered a balanced market, and also continued impressive market demand. The stable inventory conditions and momentum of demand are encouraging sellers, who have been on the hunt for just the right time to list their homes, to finally bite the bullet and enter the game.
I am seeing buyers in the mid-to-top tier price markets that are ready, willing and able to make an immediate purchase. However, they have become pickier over time and expect the properties that they are inspecting to be in excellent condition, or priced to compensate for repairs and maintenance that are required to bring it to move-in condition.
Though reports of total sales appear to show waning activity, transactions of distressed properties have become a diminutive portion of the market, causing wide irregularity in data year-over year. In fact, sales of foreclosed and short-sale properties in the Sarasota Real Estate Market have fallen more than 70% since last year at this time. When reviewing numbers of “traditional” sales, closings on existing homes and condos not in the distressed group have grown 11.7% and 2.5% respectively.
With homeowners seeing a return to equity on their current homes as real estate values have increased, cash sales, especially at the top of the market, continue to be strong in the Sarasota Real Estate Market. This element will also contribute to quicker closings. If you are a potential seller and haven’t listed your property yet, here are some things to consider:
- Listings of new inventory are increasing in the market, which is expected to continue making competition more likely as the year progresses.
- More buyers have ready cash or credit to make a rapid decision.
- Interest rates for new mortgages remain at extremely low levels – last month a 30-year mortgage averaged just 3.6%. Imagine locking in your new purchases for 30 years at less than 4%!
- What are you waiting for to make your next move, whether it be a move-up, downsize or geographic move?
As noted earlier, despite news of overall softening sales over these last several months, when put into perspective with the changing distressed homes situation, where low priced inventory was being picked up by investors, I believe we have fundamentally stable conditions. Sales month-to-month this year are trending at a typical pace for each month without any signs of volatility. And while numbers of units sold have dropped slightly, rising prices created a greater total dollar volume of sales of single-family homes 6.2% and condos 6.4%.
- In Sarasota, May single family home sales decreased 7% compared to May 2015 and condominium sales fell 12%.
- The Sarasota real estate market has averaged 978 sold properties per month this year. Houses average is 655 properties sold and for condos it is 323.
- The monthly average of pending sales this year is 821.
- Sarasota is averaging monthly sales of $342.3 million.
- U.S. real estate sales in May rose 4.7% for single-family homes and 3.3% for condos.
- Florida’s housing transactions had 4.5% more single-family home sales and condo sales were equal to last year.
- According to the Realtor Association of Sarasota Manatee, the pace of pended sales in May was down 9% from April, but 31% fewer than May 2015. This is a metric that is important to monitor since it tends to be a predictor of closings over the next 30-90 days.
- It is important to note that though this statistic sounds rather dramatic, this is a trend we have seen much of this year, without actual monthly transactions falling behind prior year by the same measure.
- All cash sales in Sarasota continue to be strong with 50% of the monthly transactions closed without a mortgage. 42% of single-family and 66% of condos sales were all cash. These numbers represent one of the highest rates of cash transactions in the country in our sized region. By comparison, the national average of cash transactions was 22% of all sales.
Median prices in the Sarasota Real Estate Market continue to climb at double-digit rates, a particularly strong pace compared to many of the country’s markets. However, compared to the peak of the market in Sarasota, prior to the housing crash that started in 2006, single-family homes and condominiums remain comfortably below that extreme. With a steady flow of new homes and condos as well as existing properties coming on the market, we should see gains in prices, though as we are easing closer to stabilized conditions, price growth is expected to slow a bit.
- In May, Sarasota’s single-family homes were sold at a median price of $263,000 vs. $230,000 a year ago, an increase of 14%.
- Condominium median sale price grew to $218,975, an increase of 4.3% over May 2015.
- Florida median price for a single-family home is reported to be up 10.5% over last year, to $213,000, and condo median prices increased 4.4%.
- Nationally, median prices for all homes rose 4.7%, with single-family homes now at a median of $241,000 and condos $229,600. This is the highest median price in nearly the last decade on the national level.
- The average sale price for houses in Sarasota was $378,023 in May vs. $345,956 a year ago, a 9% increase.
- Sarasota homes sold at 95% of the list price.
- Sarasota’s condominiums sold for an average price of $357,441 vs. $317,371 a year ago, a 13% increase.
While demand is still ahead of supply, inventory in the key mid-tier and luxury price categories is inching up. Last month, the Sarasota Real Estate Market saw new listings in the mid-tier segment ($300,000-999,000) increase by about 25% over prior year, while sales fell in the category by about 10%. At the luxury level (over $1 million), listings grew by 29% with sales also declining about 10% compared to the same month in 2015. In both cases inventory growth outpaced sales activity indicating that the gap between a buyer’s and seller’s market is narrowing in these key price categories.
- Total available inventory in the Sarasota Real Estate Market has increased by almost 700 properties or 18% since the beginning of this year. For single-family homes inventory has grown 15.3% and condos 33%.
- Compared to May 2015, in the price range of $250,000 to $600,000, where the majority of sales occur in our market, the inventory increase is 34.6%.
- Total inventory in the Sarasota Real Estate Market is reported to be at a 4.1-month supply based on the average monthly sales total for the first four months of this year, still reasonable shy of a balanced market, which is defined by a 6-month supply of inventory. Our months of available inventory has not risen above 6 months this year.
- Sarasota is averaging 1,419 new listing per month this year and currently shows available inventory of 4,769 properties for sale.
Builder confidence remained high when surveyed this month. However, there are signs that labor and specialty sub-contractor availability will remain concerns through the end of the year, limiting any appreciable increased flow of new home inventory to market.
According to all of the local, regional and national data resources and expert reports that I monitor, it is clear that the Sarasota Real Estate Market represents one of the most steady of the local markets that I watch. The statistics that I review show clearly and convincingly that our region has sustainable market stability.
Even with increased inventory, which is expected to continue to rise, it is my belief that price appreciation will maintain a steady rise and sales will remain stable. As the temperatures rise and backyard barbecues become a family staple, let’s also fire up the Sarasota Summer Selling Season!