As 2021 is coming to a close, I thought I would use this opportunity to take a look back at this most unusual year, and forward to what we might expect in the New Year.
The 2021 Sarasota Real Estate Market has been like none other. Significantly impacted by the pandemic, the region experienced a frenzied year as buyers relocating from urban areas, higher tax states, those seeking an improved lifestyle, early retirees, and new work-from-home émigrés pursued homes and condos at a record pace.
Records were broken for fewest days on market, mortgage rates, prices, and exceptionally low inventory. While the market may temper some in 2022, it will remain hot as too many buyers chase too few homes.
Purchasers of second homes and those looking to move their primary home to Florida rocketed in vacation destinations such as ours – one estimate put demand for second homes at more than 80% above pre-pandemic levels.
Primary essentials for these buyers were flexible floor plans allowing for multi-functional spaces for work, play, and sanctuary, and private outdoor entertaining and recreation space was also a priority.
New and nearly new homes and condos were preferred by luxury buyers, so our neighborhoods experienced remarkable transitions, as seemingly “livable” homes were removed to make way for bigger, better, newer.
Our “seller’s market” experienced a shift from buyers making “offers” to all-out bidding wars, with some realtors reporting as many as 30 offers coming for a single property. Buyers were willing to waive contingencies, inspections, offer sellers extended occupancy dates, and the buyer sight-unseen phenomenon became a new norm. 2021 could be defined as a year of great disappointment for many eager buyers.
As affluent Americans are taking advantage of their increase in home equity and gains in the stock market, along with the flexibility of working from anywhere and appeal of the stability of the home-asset in our volatile economy, it is difficult to be anything but bullish on the ability of the Sarasota Real Estate Market to remain strong as we enter 2022.
Here are a few (near) year-end data points that illustrate our remarkable market revolution:
Year-to Date 2020 2021 Change
- Sales Volume # units 12,610 15,183 + 20%
- Sales Volume $ (Millions) $3,845.6 $5,717.7 + 48.7%
- Median Price SF Home $318,335 $390,279 + 22.6%
- Median Price Condo $253,121 $313,258 + 23.8%
- Average Price SF Home $448,424 $569,285 + 27%
- Average Price Condo $380,529 $526,250 + 38.3%
- Inventory # units 2,467 963 – 61%
The Sarasota Real Estate Market will remain a seller’s market. I expect 2022 will be similar to 2021 but with less frenzy, but equal demand, continued high sales volume, more price escalation and continued competition. The insatiable demand for Sarasota properties is not expected to wane, especially as the borders reopen and our Canadian, European, and South American buyers return.
Sellers are expected to retain their advantageous position, however after the first quarter I believe we will see inventory levels creeping back up. As this occurs, buyers will have more choices so it will be crucial for sellers to trust their realtors as they advise on how to stand out from a crowd to attract the highest and best offers.
With more inventory will come an easing of the intensity of buyer competition. Though I do not anticipate an end to the multiple-offer trend for best-in-class properties and prized locations.
It may be difficult to top this year’s extraordinary number of properties sold, however, total dollar volume will continue to grow as prices sustain their upward track. Prices will see a moderated pace compared to this year’s steep trajectory.
Hesitant sellers who have been waiting to list their properties for fear of not being able to find their next home will finally be coming off the sidelines. Again, savvy realtors capable of advising a seller/buyer client will be highly sought after. Knowing the region as well as I do and having close relationships with the area’s best realtors provides me a unique position to guide these complex transactions.
Limited inventory of existing homes, especially those with innovative design and amenities, is driving many of my luxury buyers to turn to new construction. As mentioned earlier, this may be reimagining a property and building new, or looking to the extraordinary new communities east of our downtown core, as well as the many new condominium projects getting underway.
New construction remains well below pace of population growth and demand. This year’s rate of construction is just beginning to reach the activity seen in 2003. Following the housing bubble events in 2008, new home construction volume sputtered for years. The gap between buyer demand and supply that we are experiencing today is very much a result of a 5-year steep drop in new permitting, and a very slow pace of recovery to previous activity levels.
Today builders are challenged by supply chain issues, general staffing as well as skilled labor. In fact, the Commerce Department reported that new home sales have declined 14% from last year. However, US home builders remain confident, and even with prices of new homes growing 18.8% year-over-year, new development is not expected to slow from its current pace, though economists believe building to meet demand is still years away.
Bottom line – hold on tight, we’ve got another active year ahead!
As you consider your real estate goals for the year ahead, whether buying or selling, having a professional with a critical and analytical approach, an understanding of the realities, and able to set expectations based on pragmatic and practiced conclusions will ensure your goals are achieved.
With decades of experience managing hundreds of transactions, and experiencing the Sarasota Real Estate Market’s variability, my knowledge throughout the region can help. Whether looking to relocate to a new neighborhood, considering upsizing or downsizing, or adding to your real estate portfolio, I would be happy to discuss your next steps with you.
And now for my statistical report on the November Sarasota Real Estate Market activity:
- Total market dollar volume in November was $630.8 million, which was within $1m of the same month volume in 2020.
- Broken down, single-family sales were $457.0 million and condo sales were $173.8 million for the month.
- The number of properties sold last month was 1,184; 88 less than a year ago. The monthly average of sold properties this year is 1,380. The monthly average was 1,179 in 2020 and 1,074 in 2019.
- Florida’s single-family sales increased 4.3% from last year, and condo sales were 5.4% above last year. Homes sold for in excess of $1 million were 34.6% higher than November 2020 and condos closed at over $1 million rose 49.3%.
- U.S. sales with single-family sales fell 2.2% and condos were equal to last year.
- Of the closed sales in November 99 were for over $1,000,000, 67 were houses and 32 were condominiums.
- In 2020 Sarasota averaged 50 house sales and 23 condo sales per month over a $1 million, while this year we are averaging 84 houses and 45 condos over $1 million.
- Last month 1,163 listings went pending, almost the same as a year ago. For 2020 the monthly average for pending sales was 1,264 and this year it is 1,382.
- Florida’s single-family pending sales fell 13.7% and condos were down 13.8% compared to last year.
- U.S. pending sales in November were 2.7% below last year.
- Single-family homes were sold at a median price of $419,225. The 2020 monthly average median price for houses sold was $321,000 and this year it is $390,279.
- In November, Florida median price for single-family homes was $364,900, a 19.6% increase over last year.
- The national median price for existing homes grew 14.9% to $362,600.
- The Sarasota condo median sale price was $349,900. The 2020 monthly average median price was $255,000 and this year it is 313,258.
- Median price for a Florida condo last month was $273,270, a 19.9% increase over November 2020.
- U.S. median condo price grew 4.4% to $283,200.
- Sarasota houses sold on average for $548,592 whereas the 2020 monthly average was $455,000.
- Condos sold for an average price of $495,039 in November. The condo monthly average sale price in 2020 was $382,000.
- Currently there are 963 properties for sale in Sarasota. This is a decrease of 61 listings from the month before and the lowest monthly ending number of listings this year. There were 2,272 at the end of 2020, 4,086 at the end of 2019 and 5,401 at the end of 2018.
- The Sarasota market had 1,163 new listings the past month. The market averaged 1,040 new listings in 2019 and 1,130 this year. With new listings virtually equaling sales, we continue to be at extremely low levels of properties for sale.
- Current inventory results in 0.7 months of single-family homes for sale in Sarasota and 0.6 month’s supply of condominiums.
- Florida currently has 1.2 months of single-family inventory and 1.5 month’s supply of condominiums. Inventory of properties selling for over $1 million have decreased about 30% from last year.
- U.S. inventory of existing single-family homes and condos has fallen 13.3% to 2.1 months of supply.