The Moulton Sarasota Real Estate Report – February 2018
Sarasota Real Estate Market’s Spirited Start to Spring Selling Season
After strong pending sales in the Sarasota Real Estate Market in January, it came as little surprise that February activity was robust. Sales continued to escalate over prior year posting particularly strong numbers in the $1 million+ tier, where most of my business occurs. The sales at this level tend to be low in numbers of transactions, nevertheless, the super-luxury condominiums just completed and ready for occupancy in several new downtown projects once again not only lifted numbers of units sold, but also contributed to total dollar volume of the condo market growing by more than 61% over prior year.
Across the rest of the U.S., sales in February were not nearly as spirited. Experts are leaning towards blaming it on an unseasonably cold January causing growth to flatten, especially in the Northeast and Midwest regions. It is likely that sales reports in the next few months on the national stage may stay restrained as a result of the major late-winter storms all across the nation.
Inventory of all types of units in The Sarasota Real Estate Market contracted a bit, and was especially noticeable in the luxury market where there are now 10.2% fewer million dollar homes and 30.6% less condos available. Granted, there are still almost 500 homes priced over $1 million and 134 condos, but the narrowing of supply here is good news for sellers who have seen long listing to sale periods. Recent changes in inventory are beginning to shorten the timing for a transaction to close.
February’s pending sales once again were well ahead of this time last year, setting us up for another month or two of excellent closing activity ahead, especially in the condominium market where pending sales grew more than 21% over prior year.
Homebuilders here and around the country are lamenting scarcity of buildable lots (regulations and lack of infrastructure two key issues), rising building costs (product, labor and municipality fees), and most importantly, a persistent shortage of qualified labor as key causes of not being able to keep up with new home demand. For the first two months of 2018 Sarasota’s builders have pulled 31% fewer new single-family home permits. The multi-family market is not seeing the same declines, but with demand staying strong for new homes, especially in the moderate price points, we will keep seeing increases in prices as inventory of new homes remains limited.
In reviewing local, state and national market statistics and analyst reports, the following are some of the highlights of the data:
- Total Sarasota Real Estate Market dollar volume of $358.6 million in February increased $75.4 million from prior year, and increased $11 million over the prior month.
- Broken down, single-family dollar volume increased 12% compared to prior year and condo sales dollar volume was up 62%, fueled by another month of new construction condo closings.
- The number of properties sold in February including both single family and condominiums was 884, which was 29 more than January and 90 more than a year ago, representing a 11% overall growth in number of closings in the month over last February.
- Florida’s single-family sales increased 3.3% and condo sales grew 6.4% over prior year.
- S. single-family sales increased 1.8% and condo sales fell 4.9%.
- The 2017 monthly average of total sales in Sarasota was 978 and in 2016 the monthly average was 952.
- The majority of my sales occur in the $1 million and above category, so I watch this tier closely. Of the closed sales in Sarasota last month 62 were for over $1,000,000 or 7% of total sales – 34 were houses and 28 were condominiums. This represented 63% more sales over $1 million compared to the same month in 2017.
- Florida’s $1 million sales were 3.1% of total sales.
- All cash sales in Sarasota continue to be strong with 46% of single-family and 65% of condo sales closed without a mortgage. By comparison, national all cash transactions were 24% of total sales.
- Total pending sales of 1,271 properties that went under contract during February increased by 108 from the same month last year, a 9% increase, with homes showing a 3.5% increase and condominiums up 21% from prior year.
- S. pended sales for all housing types fell by 4.1% compared to prior year.
- Florida’s total pending were just about the same as last year.
- The monthly average of new pending sales in the Sarasota Real Estate Market in 2017 was 1,043 vs. 1,005 in 2016. For the first two months of 2018 we have averaged 1,257 pending contracts signed.
- In February, Sarasota’s single-family homes were sold at a median price of $272,500 vs. $257,500 a year ago, 6% higher.
- The 2017 monthly median price average for houses sold in Sarasota was $267,043 and $249,943 in 2016.
- Florida median price for single-family homes was $246,500, a 9.6% increase over last year.
- The national median price for existing homes grew by 5.9% to $243,400.
- Condominium median sale price was $219,000 in February vs. $230,900 in February 2017.
- The 2017 monthly condominium median average is $225,585 vs. $208,539 in 2016.
- Median price for a Florida condo last month was $179,500 a 7.2% increase over February 2017.
- S. median condo price grew 5.7% in February to $227,300.
- The average sale price for houses in Sarasota was $398,148 in February vs. $389,011 a year ago.
- The past year’s monthly average price for houses sold was $370,708 vs. $346,232 in 2016.
- Sarasota’s condominiums sold for an average price in February of $419,299 vs. $296,029 a year ago, likely attributable to the recently completed new luxury buildings in downtown.
- The 2017 monthly average price for sold condominiums is $362,378 vs. $325,802 in 2016.
- Single-family homes sold at 95.5% of list price, and condominiums sold at 95% of the list price. The 2017 average for all properties sold was 95.6% of list price at the time of contract vs. the original list price.
- Total available inventory in the Sarasota Real Estate Market has increased by 213 listed properties from January, but has 169 less properties than in February 2017 and 614 more than the end of 2017.
- Currently there is available inventory of 5,105 properties for sale, there were 4,401 at the end of 2017, 4,595 at the end of 2016 and 3,598 at the end of 2015.
- The Realtor Association of Sarasota-Manatee reports that there are 4.7 months of single-family homes inventory and 5.7 month’s supply of condominiums, both under the 6-month level considered a balanced market.
- Florida currently has 3.9 months of single-family inventory and 5.9 months of condominiums.
- S. inventory of single-family homes is at 3.4 months and condos reportedly at 3.7 months.
- Sarasota County had 1,613 new listed properties in February, averaged 1,147 new listings per month in 2017, and in 2016 it was 1,005.
- Of the total new listings the past month, 134 properties or 8% were listed over $1,000,000.
- 380 or 23% of the new listings the past month were listed for between $400,000 and $600,000.
There is some concern that rising interest rates may slow sales and result in lower prices, but historically that has not been the case. In the graph to the right, Keeping Current Matters analyzed Freddie Mac data and found that in the last six times interest rates rose more than 1%, the results were actually very different than we would think intuitively.
Actually, the laws of supply and demand far outweigh small increases in interest rates. As I wrote in last month’s report, interest rates have been above 5% for 38 of the last 46 years, so I see no need to panic as we slowly move towards the 5% rate expected by early 2019.
Market analysts are expecting overall sales to increase 4.8% in 2018 and prices to grow 5%, though in The Sarasota Real Estate Market I see exceeding these projections due to the vigorous development of new homes and multi-family projects along with the strong demand. For nearly 10 years this region saw only minimal new construction. Today’s robust building activity around the region is not able to catch up with the scarcity of development since the market collapse in 2008. There is still room to add new product based on builder reports on buyer traffic at their new development and, as long as demand outpaces supply we will see increased growth in prices.
With the region’s strong jobs market, rising wages and household wealth, attractiveness to buyers from communities around the country that are suffering from unfavorable tax conditions, our strong appeal to the international home buyer market, and the many quality of life benefits that Sarasota offers, I believe that our housing market will continue its spirited activity in the months ahead.
If you have been considering listing your property, I cannot tell you 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 grow 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.
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