As debate surrounding the country being in or facing a looming recession, there is one thing that is clear, the Sarasota Real Estate Market continues to perform exceptionally well. However, like the rest of the country it is beginning to see changing dynamics. Prices are still rising at double-digit growth over prior year, but sales volume is easing and inventory in nearly all price tiers is beginning to climb.
Competitive bidding is still happening for more desirable properties, but the pace has calmed. Demand has waned since last year’s frenzied conditions brought on by the pandemic. Those most desperate buyers have settled into their new properties and a new wave of purchasers is entering the game, joining those who lost out on properties in 2021. But the current buyer pool is more patient and understanding of our market conditions, and better prepared to spring into action than their predecessors.
Some market economists have begun to label our region as overvalued and at risk of declining prices. Without being pollyannaish, the reality in my estimation is that the demand for our area is not weakening, for either existing homes or newly constructed. Sarasota’s established and stable market will help us to maintain momentum, albeit at a more moderate pace.
Will we continue to see year-over-year double-digit price growth? Maybe not in the long-term, but I expect – yes – in the short-term. It would be virtually impossible for a swift reversal of our low inventory conditions, which resulted from a decade of slowed construction and homeowners staying longer in their homes. Until the region reaches a closer balance between supply and demand, we should not see downward pressure on prices.
Inventory is clearly one of the most critical drivers of our region’s real estate market dynamics.
The chart here shows how conditions have changed over the last five years. And even though inventory is growing, it is still well below the target 6-month supply that indicates a balanced market.
According to a variety of data sources that I monitor, days on market for existing and new properties in the Sarasota Real Estate Market has remained stable since the start of this year, at or around 20 days from listing to contract. I expect the number of days to increase through the balance of this year, but not at an alarming or market-disruptive pace.
The number of property sales in the Sarasota Real Estate Market in June, our most recent month of data, slid for the 5th month in a row, indicating a cooling of the market from the go-go pace of 2021.
In the under $1 million price tiers, sales have grown significantly over the last two years as the attached graph indicates. As existing home and condo listings remain weak, demand for our growing supply of new construction has helped to impact the absorption of inventory in the moderate price category, where much of the new home and condo properties fall.
However, recent surveys within the home builder industry are indicating a more cautious approach to starting single-family and multi-family projects. Instead, builders appear to be focusing more on selling current available inventory, while waiting to see the impact of increased interest rates, inflationary concerns, production bottlenecks, cost of land, and rising building costs.
Prices are indeed continuing to climb at a seemingly infinite pace compared to prior year, especially at the highest end of the pricing tiers.
Price growth of 20+% year-over-year is still a relatively scorching pace compared to a more “normal” annualized growth. But as seen in the attached chart, some of the impact in market-wide median sales price data is coming from the rising demand in ultra-luxury properties in the price tier over $3 million.
While there are some economists warning of a potential bubble in the national housing market, I strongly disagree as it relates to our local conditions. As long as demand outpaces supply, even with shifting market conditions, the region’s home price appreciation, pace of housing starts, and ample demand, will serve the Sarasota Real Estate Market well in the months ahead.
To buy or sell in today’s fluid real estate market, you need to engage a realtor who has rich experience in the local market. While we have not seen conditions quite like this before, engaging a professional like me with more than 40 years effectively guiding buyers and sellers through several uncharacteristic markets will be key to meeting your unique transaction desires. This market may be different, but negotiating the purchase or sale of a home or condo, especially during unique times, is what I love to do!
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 so that when it’s the right time to list your property, or a perfect opportunity comes along to buy your dream home, you will be first to know!
And now for my statistical report on the June Sarasota Real Estate Market activity:
Sales
- Total market dollar volume in June was $793.4 million which decreased by 19.6% from a year ago.
- Broken down, single-family sales were $571 million and condo sales were $222.4 million for the month.
- The number of properties sold this past month was 1,178, approximately 500 properties less than a year ago. The sales total includes 802 houses and 376 condos. The monthly average of sold properties this year is 1,207. The monthly average was 1,369 last year, 1,179 in 2020 and 1,074 in 2019.
- Florida’s single-family sales decreased 17.2% from last year, and condo sales were 27% lower than last year. Florida homes sold for in excess of $1 million were down 4.4% from June 2021 and condos closed at over $1 million fell 6.7%.
- U.S. sales of single-family homes declined 12.8% in June and condos were down 24.7%.
- Of the closed sales in June for over $1,000,000, 98 were houses and 42 were condominiums.
- In 2021 Sarasota averaged 128 sales per month over a $1 million.
- In June 923 listings went to a pending contract, a decrease of about 300 transactions from a year ago. For 2021 the monthly average for pending sales was 1,122 and in 2020 it was 1,264.
- Florida’s single-family pending sales fell 20.9% in June and condos declined 30.1% compared to last year.
- U.S. pending sales in June were 20% below a year ago.
Prices
- Single-family homes were sold at a median price of $500,000 in June. The 2021 monthly median price for houses sold was $394,000.
- In June, Florida median price for single-family homes was $420,000, a 19.7% increase over last year.
- The national median price for existing homes grew 13.3% to $423,300.
- The condo median sale price was $416,240 in Sarasota. The 2021 monthly median price was $317,153.
- Median price for a Florida condo in June was $324,900, an increase of 26.4% from 2021.
- U.S. median condo price grew 11.5% to $354,900.
- Sarasota houses sold on average for $711,913 where the 2021 monthly average was $573,000 and in 2020 it was $321,000.
- Condos sold for an average price of $591,494 in June. The condo monthly average sale price in 2021 was $527,000 and in 2020 it was $382,000.
Inventory
- Currently there are 1,954 properties for sale in Sarasota. This is an increase of 502 listings from the month before. There were 829 listings at the end of 2021, 2,272 at the end of 2020, 4,086 at the end of 2019 and 5,401 at the end of 2018.
- Of the available inventory for sale, 475 properties are listed for over $1 million. Of the active listings over $1,000,000, 336 are houses and 139 are condos.
- The Sarasota market had 1,582 new listings in June. The market averaged 1,321 new listings monthly in 2021.
- Current inventory results in 1.7 months of single-family homes for sale in Sarasota and 1.5 month’s supply of condominiums.
- Florida currently has 1.9 months of single-family inventory and 1.9 month’s supply of condominiums.
- U.S. inventory of existing single-family homes has grown 2.4% year-over-year.
