A Sweet ’16 is in Sight!
As 2015 comes to a close, Sarasota Real Estate Market Data is proving that some predictions can come true – Sarasota Real Estate Sales are certain to break all-time records for number of sales, and in some price categories, dollar volume, as well. The number of November closings increased over prior year setting the stage for this milestone. Early data for December sales, as reported by TrendGraphix, indicates that closings are pacing at nearly 20% ahead of last year, contributing to analyst projections that 2015 will indeed exceed last year’s historic high.
As pundits and prognosticators peddle their predictions for 2016 to the media, it becomes very evident that as has been said in my blogs before – real estate is a local sport. Experts speak of waning sales nationally, price escalation flattening across most of the country and builder confidence softening in the next 12-months. Yet Sarasota’s incoming migration is predicted to grow at a minimum of 3% per year over the next several years, unemployment has fallen to sustainable levels, the local economy is diversifying to ensure long-term robustness, regional new construction is reaching new heights – impeded only by available labor and product. It doesn’t take much to reason that we are on track for a “Sweet ’16!”
Despite some global financial markets making US investment more expensive than the last many years, international buyers still deem acquisition of American Real Estate to be a solid security, especially in coastal communities. With a large percentage of buyers in the Sarasota Real Estate Market coming from Canada, Western Europe and Latin American, international interest in the area is not expected to diminish in the foreseeable future. One of the many reasons I continue to value being a member of the Michael Saunders & Co. team are the exclusive relationships the company has established with distinctive international brokerages, allowing me to tap our global partners to reach buyers for our luxury Sarasota Real Estate listings.
As has been written about in one of my recent blog posts, the Baby Boomer population is another of our “sweet” spots and, with the majority of my luxury sales being to this group, I am also noticing their ability and desire to close their transactions in cash, taking any change in the mortgage rates coming next year out of the equation.
Add our stunning waterfront, exceptional year-round climate (ok maybe a little warm this December,) abundant recreational and cultural activities available, extraordinary dining and shopping for every taste, I see no change to this year’s single challenge – excess demand over supply. In my opinion, the only impediment to repeating 2015’s Sarasota Real Estate Market success, lies in bringing enough new listings of existing and new inventory to our eager buyers.
The following data reflects reporting through the local, state and national realtor associations, as well as a number of other statistical providers nationwide. With the real estate market representing one of Florida’s most important economic drivers, there is never a shortage of analysts and experts reading the tea leaves!
November Market Data
As mentioned earlier, real estate is local. National sales this last month fell 3.8% compared to Sarasota Real Estate’s growth over prior year. What is happening in the rest of the country is far more tied to temperatures and the seasons, school schedules, even commodities such as oil. Sarasota’s activity does indeed swell in the winter months when we welcome the most visitors, but the fluctuations tend to be less severe than felt elsewhere in the US.
- Total sales in November in the Sarasota Real Estate Market were up 8.2% from the same month a year ago.
- In Sarasota single-family closings increased 9.5% and condos rose 7.3% over November 2014.
- In contrast, Florida’s single-family transactions increased just 1.9% and condos were up 5.7%.
- Nationally, single-family sales were down 4.6% to prior year and condos were only up 1.7%.
- The year has been strong – total sales have grown 7% year to date from the end of 2014.
Some real estate analysts believe that the new mortgage rules tied to the TRID regulations – referred to as “Know Before you Owe,” may have contributed to the national slowdown this last month, and that as realtors, mortgage providers and buyers become more accustomed to the new guidelines the time from application to closing will likely decrease.
The pace of contract signings in November was down 8% from the previous year. This is in part due to the continued tight inventory, especially move-in condition, well-located properties. With our annual sales already 7% ahead of the 2014 pace, and the Sarasota Real Estate Market set to reach a 100-year record number of transactions by the end of 2015, staying within a reasonable pace to last year should allow us to continue our strong, yet sustainable market growth.
With a declining inventory in the distressed and lower priced categories, has come a market populated with more higher quality inventory, and along with growing demand this puts upward pressure on median and average prices. Despite reports of records in new home sales, the number coming to market is still well below demand. Given that relief in the inventory deficiency is still sometime away, prices are expected to continue their ascent. In fact, a recent report from CoreLogic, a data-driven insight source, stated that price appreciation in Florida is expected to grow another 9+% next year, the second highest pace of appreciation behind California. In comparison, their report suggests that national home price growth is likely to be 4% in 2016.
- Single-family homes saw a median price of $228,750 vs. $193,000 a year ago, an increase of 18.5%.
- Sarasota’s condominium median sales price for the month was $199,000 vs. last year’s $175,000, an increase of 12%.
- The median price of U.S. closed sales last month increased 6.3% over previous year, with home prices up 6.6% and condos up 4.7%.
- Florida’s single-family homes sold at a median of $200,000, 13.6% ahead of prior year, and condos were $150,000, up 7.1%.
- The average sale price for houses in Sarasota was $327,954 in November vs. $285,276 a year ago, a 13% increase. Sarasota homes sold at 94.6% of the list price.
- With condominiums, the average sale price was $309,171 vs. $285,234 a year ago and they sold at 94.8% of list price.
- 56% of the closed sales were paid in cash, broken down it was 72% of condos and 50% of single-family homes.
- The national average sale price for a home rose 4.5% over prior year.
In November, Sarasota Real Estate inventory increased by 321 properties from month-end October. It is typical this time of year to see increasing available inventory for the winter selling season. As the year winds down, our inventory totals are only slightly less than the end of 2014, but 13% less than the end of 2013. One of the concerns with low inventory is that it may keep want-to-be sellers on the sidelines, fearing that if they sell their property they will not be able to find what they are looking for in their next home.
- Total inventory in the area is currently at a 3.7 month supply, well below a balanced market, which is defined by a 6-month supply of inventory.
- Properties under $500,000 have just 2.8 month’s supply.
- In the category $500,000 – $1 million, inventory is 7.9 months.
- For properties over $1 million, there is a 17-month supply.
- National inventory totals are at a 5.1 month supply, 1.9% less than at the same time last year.
- Florida inventory is near a 5-month supply.
Sarasota, with its enviable location and weather, understated sophistication, lively downtown, rich cultural offerings, safe and varied communities, engaged residents, and comparatively moderate price of housing will continue to drive new residents to the area. With our peak selling season in front of us, I remain extremely bullish on the Sarasota Real Estate Market through the end of this year and into “Sweet ’16!”
With limited properties available and a record tourist season expected, I see bidding wars for prime properties to become more prevalent, narrower list-to-sale ratios, and prices to continue their escalation as buyers chase their properties in this tight inventory climate.
Perhaps it’s time for you to take action on your real estate plans – are you wanting to purchase a retirement or investment property? Is it time to move into the “lock-n-leave” condominium you’ve been thinking about? Ready to up-size or down-size? How about that neighborhood you’ve been longing for? Whether your plans call for buying and/or selling, after almost 35 years in Sarasota specializing in luxury real estate, it would be my pleasure to share my experience, knowledge and understanding of our unique market to help you meet your special needs.
The following statistical data is provided through the Realtor Association of Sarasota and Manatee for properties throughout Sarasota County. The table summarizes what happened in each price segment. The Sold, Pending and Listed columns are sales and new listings for the month of the report, and the Pending Total and Listed Total are the current totals of each at the report’s month end.
SARASOTA COUNTY MARKET REVIEW – November 2015