The Moulton Sarasota Real Estate Report – March 2016
Demand + Inventory + Appreciation = Market Optimism
As my Sarasota Real Estate Market Report readers know by now, I am generally an optimist and like to see the silver lining in just about any market scenario, but one can’t ignore the consistent reports of softening sales and wonder…is everything ok? The simple answer is YES! There continues to be very strong demand from buyers, inventory is growing and consumer confidence remains positive.
But I am often being asked by clients and colleagues why, with increased inventory and rising prices, sales are not rising at a parallel pace. The answer is elusive, and if you read as many analyst and expert writings on the subject as I do, you would see a wide variety of opinions. My belief is that it has much to do with the considerable reduction in distressed properties on the market over this last year, creating less inventory in the lower price tiers where investors had been generating a lot of unusual activity.
My recent experience in the Sarasota Real Estate Market is that I see buyers who have cash to make a swift purchase or strong equity in their current residence that can quickly go to work for them, and though inventory has recovered to a healthy balance, they seem willing to wait to find just the right opportunity. It seems that the buyers’ mentality is that prices will indeed maintain an upward path, but not at a pace that makes them uncomfortable…yet.
Sales transactions in the Sarasota Real Estate Market in the month of March fell 6% overall compared to prior year. However, in the luxury tier of our housing market, properties priced over $1 million where the majority of my work is, single family sales actually rose 34.6% compared to last year and condominiums saw a 20% increase. The biggest decrease in number of sales was in the under $200,000 sector where there was a nearly 42% drop in sales transactions last month. So while it appears our sales are softening, this data shows that indeed the distressed market had a significant impact on the overall market data. Digging deeper into the specific price tier dynamics is valuable in assessing the market.
Studies have shown that psychologically, buyers prefer to act when prices are rising. If this is true, along with the increase in inventory and strong market demand, there is plenty of support for my continued confidence in the health of our Sarasota Real Estate Market.
The following is a snapshot of statistical data assembled from a wide variety of regional, state-wide and national resources.
Sales:
Sarasota Real Estate Market activity fell short of the same month in 2015 as noted earlier. However, this trend was reflected throughout the state of Florida and was not unique to our region. And while Sarasota’s overall drop in sales was 6%, our neighbors to the south had an even larger gap year-over-year. Lee County had more than 15% fewer sales than the same month last year and the Naples area saw sales fall more than 20%.
- In Sarasota, March single family home sales closings decreased 3% compared to March 2015 and condominium sales fell 6%.
- S. real estate sales in March rose 2.6% for single-family homes and 4.6% for condos.
- Florida’s housing transactions had .6% fewer single-family home sales and 7.1% fewer condo sales.
- According to the Realtor Association of Sarasota Manatee, the pace of contract signings in March was up 6% from February but down 20% from the previous year. This is a metric that is important to monitor since it tends to be a predictor of closings over the next 30-90 days.
- All cash sales in Sarasota continue to be strong. In fact, last month Sarasota was the 3rd highest MSA in the U.S. for cash transactions as a percentage of all sales. Only Naples and Miami were higher, and by only a small margin.
Inventory:
Inventory has been creeping higher…and that’s a good thing! In fact, some of the soft sales numbers we’ve seen over the last couple of months are likely the result of a severe dearth of properties for sale in the last quarter of 2016. The bulk of new listings in the Sarasota Real Estate Market last month were in the $300-600,000 set, though luxury properties have also seen a flow of new properties. With the completion of several luxury condominium projects over the next six months, as well as a large number of new single-family homes being built in communities east of U.S. 41 and I75, it appears that we will be seeing both sales and inventory growth through the end of the year.
- Total inventory in the Sarasota Real Estate Market is reported to be at a 5½ month supply based on the average monthly sales total for the first three months of this year, nearly a balanced market which is defined by a 6-month supply of inventory.
- Properties under $500,000 have a 4 month’s supply.
- In the category $500,000 – $1 million, inventory is 12 months.
- For properties over $1 million, there is a 20 month supply.
Prices:
Here’s where the Sarasota Real Estate Market gets interesting! RealtyTrac just released a report that showed that the North Port/Sarasota/Manatee MSA had one of the highest average price gains in the country for homes owned an average of eight years. While the U.S. average gain was 17% since purchase, our MSA had a 33.8% increase in appreciation. This added home equity should encourage more homeowners to take advantage of the demand in our market.
- In March, Sarasota’s single-family homes saw sales at a median price of $244,000 vs. $207,750 a year ago, an increase of 17%.
- Florida median price for a single-family home is reported to be up 10.3% over last year, to $209,500.
- Nationally, single-family homes sold at 5.8% more than last year and are $224,300.
- Naples homes are selling for a median price of $400,000, a 5% increase over prior year, and Ft. Myers homes are up 4.2% to $225,000.
- Sarasota’s condominium median sale price for the month was $196,000 vs. $180,745 last year, an increase of 8%.
- Florida’s median condominium price in March was $155,000, up 3.3% over prior year.
- The U.S. median for a condominium was $209,600, a 4.6% increase over March 2015.
- Naples condo prices were $258,000 last month, a 3% increase over prior year. Myers prices for condos fell 4.2% to $172,500.
- The average sale price for houses in Sarasota was $356,303 in March vs. $303,514 a year ago, a 17% increase. Sarasota homes sold at 95.4% of the list price.
- Sarasota’s condominiums sold for an average price of $302,692 vs. $258,921 a year ago, a 17% increase, and they also sold at 95.4% of list price.
According to Freddie Mac, interest on a 30-year fixed rate mortgage averaged 3.68% last month. By year’s end, the price of a mortgage is unlikely to be much higher than 4%. Home builders announce new project starts daily it seems, and the communities that are currently under construction will begin to be occupied soon, creating a stream of closings.
With demand appearing to be quite strong, inventory numbers growing, consumer confidence still very optimistic, I like the overall state of our market. The Sarasota Real Estate Market is in good balance and positioned well to continue its stable course.
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 – March 2016
