Listings in the Sarasota Real Estate Market have been steadily improving conditions to bring the market into better balance when it comes to supply and demand. Since a low in 2020 of 23 days on market for new listings, an unbelievable reduced inventory of just over 2 months supply, and nearly 68% absorption rate, a sense of normalcy has now returned.
Over the last six months, the pace of properties in all price points going under contract has averaged 11.8% higher than the same months prior year. In the upper tier, over $1 million, contracts signed are up more than 40%. As you will see in the following chart, having quality inventory to present to buyers is really helping to ease the wide gap that existed between buyers and sellers, which our region experienced following the onset of the pandemic.
Though increased inventory has decelerated price growth, which benefits buyers, prices are stable and continuing to appreciate. Demand in the luxury tier has not waned and, despite there being increased inventory, as noted above, more contracts are being signed than in previous years.
High quality and well-located properties stay on the market for less time than in pre-pandemic years. Our top tier buyers are unaffected by the interest rate fluctuations, have narrowed their focus to key neighborhoods and developments, and are working with the area’s top real estate professionals to seize on a listing either pre-MLS posting or shortly after.
Sellers are seeing a slowing of listing to sale periods. With buyers having more product to choose from, seller expectations that became the norm during the 2020-22 frenzy such as competitive offers, minimum negotiating, and buyers overlooking necessary repairs, are a thing of the past. Sellers who have timeframes in which they “need” to move on from their home are having to rethink their ambitious selling price hopes, and becoming more realistic based on market comps on what their home will sell for. A much larger percentage of properties are re-pricing than we have seen for several years.
Single-family and multi-family builders remain confident the demand for real estate in our market is not subsiding. With cost of goods, supply issues, and labor concerns lessening, new construction is expected to stay active for the foreseeable future.
According to the Sarasota-Manatee Realtors data, single-family homes for sale are now at a 6.7- month inventory level, and condominiums for sale have a 5.2-month supply. With the pace of pending sales growing, it is expected that home prices in all price categories will likely grow 3-4% year-over-year in 2024.
One of the bigger challenges that I have heard buyers recently object to is the increase in cost of homeowners insurance. Bankrate issued a report last month stating the US homeowner insurance costs were up 23% from pervious year. In Florida, the average increase was 35% compared to a historical average of 12.3% per year. Florida legislators have presented a number of bills aimed at slowing increases. While some have been approved over the last few years, it will take time before rates reflect approved plans, including this year’s session’s success in the elimination of certain taxes and fees to be removed from Florida taxpayer insurance costs.
Buyers and sellers are more accepting of current interest rate conditions. Though economists and financial experts were expecting rates to fall below 6% this year, they now believe US economic conditions are giving the FED little reason to consider more than a few minimal rate reductions in 2024. Would-be sellers have been sitting on the sideline, but life events can’t wait much longer to move on. Both increased inventory and growth in contract signings show both sides are ready to go forward without interest rates affecting their plans as much as they weighed on decision-making last year.
Though home sales activity according to MLS appears to have slowed, the increase in pending contracts signed in the last few months leads me to believe that Sarasota Real Estate Market conditions are certain to remain active in the months ahead.
In today’s ever-fluid real estate market, the value of partnering with a highly experienced, locally as well as globally connected agent/broker, and a skilled negotiator and advocate cannot be overstated. Having served clients in The Sarasota Real Estate Market for 40 years and carefully analyzing our business conditions, I have developed essential insight to assist both sellers and buyers in achieving their objectives.
Buying homes this season will take some strategy. As new listings come on the market there are many eager buyers waiting to jump at a property that can meet most of their wish list. Buyers need to be prepared to communicate their “must haves”, “nice to have”, and “bonus haves” to their realtor so that we can alert you as soon as we hear of something that is coming on the market or has listed and checks most of your boxes.
Please reach out if you are considering selling your property or buying another – it would be my pleasure to meet with you to discuss your goals. An understanding of the realities, the ability to evaluate and guide client expectations, and expert management in negotiating the purchase or sale of a home or condo, I ensure that your goals are realized.
Below is a snapshot of the Florida Association of Realtors February data showing Sarasota’s existing homes and condos activity selling for over $1 Million:
And now for my statistical report on the February Sarasota Real Estate Market activity:
Sales
- Total market dollar volume in February was $572 million which increased by $25 million from a year ago.
- The number of properties sold in the month was 847; 30 more than a year ago. The monthly average in 2023 was 953, in 2022 it was 1,004 and in 2021 1,369.
- Florida’s single-family sales increased 2.2% from last year, and condo sales were 2.5% below last year.
- U.S. sales of single-family homes declined 2.7% and condos were down 8.9%.
- Of the closed sales 98 were for over $1,000,000, just slightly fewer than February 2023. In 2023 Sarasota averaged 126 sales per month over $1 million, in 2022 the average was 111 and in 2021 128.
- In February 1,185 listings went to a pending contract, which was a slight increase from February 2023. There was an average of 678 monthly pending transactions in 2023, 968 per month in 2022, and 1,347 in 2021.
- Florida’s single-family pending sales fell slightly, and condos declined almost 5% compared to last year.
- U.S. pace of pending sales in February was 7% behind a year ago.
Prices
- Single-family homes were sold at a median price of $507,500, up 2.5% from a year ago. The average monthly median price for 2023 was $510,000, in 2022 it was $493,000 and in 2021 $394,000.
- In February, Florida median price for single-family homes was $415,000, an increase of 5.1% over last year.
- The national median price for existing homes grew 5.6% to $388,700.
- The condominium median sale price was $389,750. The average monthly median price for condominiums sold in 2023 was $387,400, in 2022 $383,000 and in 2021 $317,000.
- The median price for a Florida condominium in February was $325,000, a 3.2% increase over prior year.
- U.S. median condominium price grew to $344,000, a 6.7% increase.
- Sarasota houses sold on average for $715,000 for the month. The annual monthly average was $695,000 in 2023, in 2022 $683,000 and 2021 $573,000.
- Condominiums sold for an average price of $591,000 in February. The annual monthly average was $622,500 in 2023, in 2022 it was $563,000 and in 2021 it was $527,000.
Inventory
- At the end of February there were 5,456 properties for sale in Sarasota. At the beginning of this year there were 4,426 listings for sale, 2,431 in 2023 and 829 in 2022.
- The Sarasota market had 1,777 new listings in February. The market averaged 1,318 new listings monthly in 2023, 904 in 2022 and in 2021 it was 1,321.
- Current inventory results in 5.2 months of single-family homes for sale in Sarasota and 6.7 month’s supply of condominiums. This is the first time in several years where the months of inventory for homes has exceeded 5 months.
- Florida currently has 3.9 months of single-family inventory and 6.3 month’s supply of condominiums.
- U.S. inventory of existing single-family homes has grown 9.3% and condo inventory increased 3.9% over last year.
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