November Market Data Supports Projections for Steady Growth in 2014
As 2013 winds to an end, we are celebrating an extraordinary recovery in the Sarasota Real Estate Market. However, the remarkable increases in prices and volume have begun to moderate allowing for a more stabilized and sustainable path as we enter 2014. Our market is clearly much healthier than it was a year ago, and after reviewing this past year’s notable improvements and the continued positive trends both nationally and locally, I offer my prediction that 2014 will be one of consistent and steady growth.
Florida has now had 24-months of consecutive gains in median price and sales. In Sarasota, the median sales price increased 20.6% over last November from $155,000 to $187,000, a clear sign of positive recovering real estate prices. The 12-month rolling median price for condominiums sold locally was $163,000, an increase of 10.1% over a year ago. Also important to note is the reduced number of days from listing to sale, which if the trend continues, will keep pressure on the need for more inventory to keep prices stable.
The Census Bureau recently reported that new home sales this year were almost 18% higher than last year, and that is on top of a 20% increase over the previous year. Homebuilder confidence has consistently grown over the year, and with housing starts up 30% in November over previous year (reported to be the largest month-over-month increase since 1990), both the builders themselves as well as related industries are expected to make a considerable impact on our overall recovering economy in the coming year. Over the last two months, Sarasota building permit applications have risen more than 100% over last year, a sign that locally we will see rising inventories to meet the growing demand, with the added effect of helping to moderate home prices.
My research shows that our region has a 4.7 month supply of available properties, based on November’s closed sales. Interestingly, November closed sales were reportedly behind the pace in 2012 and much has been reported in the media about the event, however the softer sales were not unexpected since August and September are typically our softest from a visitor perspective and contracts written in those months are what would likely be closed in November. I do not see this anomaly as anything to be concerned about. In addition, the softer sales activity could also be a reflection of the gap between demand and supply.
The greatest challenge with inventory continues to be in the under $500,000 market, which is at slightly under four months of supply. At the mid-price point of $500,000 – $1 million, the supply is sitting at a balanced level of eleven months, and in the luxury market at over $1 million, the market has 15-months of supply, which is considered healthy for the high-end of the market. Another way to analyze the months of supply for luxury properties is by looking at the average of 28.5 properties closed per month in 2013. At the worst time in our market in 2008 single-family homes had a 24-months of supply and condos were a stunning 41-months of supply. Overall, our market has moved from over 10,000 properties on the market to only 3,700 today. I remain cautiously optimistic that the single-family and condominium projects that are currently under construction, in the permitting process or being considered by area developers will help to ease the inventory deficiency in 2014 and allow us to see an increase in sales at a continued double-digit level and prices that grow moderately.
There are still a number of distressed properties yet to enter the market – those that are either listed as a short sale or are bank owned properties. However, based on my research, our region has worked through a considerable number of these leaving us at the end of November with an improvement over the last three years from 2010’s 51% of homes listed falling into the distressed category to only 490 properties, or just 13% of current listings falling into the classification today. In 2013, 2,403 of the closed sales were distressed sales or 23% of all sales. In the luxury market, those listed over $1,000,000, there are only 5 properties listed as a distressed sale and only 16 closed sales year to date.
Thoughts on 2014
As noted throughout this month’s report, there is much to be grateful for in Sarasota Real Estate – median prices have grown more than 20% over the last two years, inventory has fallen almost 20% over the same period, time from list to sale has dropped over 30%, and building permit applications and new construction starts have risen steeply. In addition, prospective buyers who have been sitting on the sidelines waiting for equity on their homes to improve so that they can move up or purchase a vacation/early retirement home, have seen those values return and are actively working with regional agents, buyers eager to take advantage of today’s still low interest rates are urgently looking to find something before next year’s anticipated increases of a projected full percentage point, and sellers hoping to make their own move are making improvements to their homes readying them for listing, I am very encouraged that 2014 will be another year of upward, yet realistic growth in the Sarasota Real Estate Market.
And finally, the importance of the choice that buyers and sellers make in an agent and broker cannot be overstated. A recent report from TrendGraphix once again underscored the dominance that Michael Saunders and Company represents in our marketplace. With 30% higher sales volume than the next competitor, 12% more sales than the #2 broker year-over-year, and a remarkable nearly 35% more market share than the next highest producing broker, MS&C continues to prove that our company and associates are the best choice for buyers and sellers looking for results. The resources, training and high-touch approach that make our agents the best in the market rings through in our consistent dominance. Congratulations to Michael Saunders, our incredible support team, and all of my fellow associates for once again being the pace-setters in Sarasota Real Estate!
The following statistical data is provided through the Sarasota Association of Realtors for properties throughout Sarasota County. The table summarizes what happened in each price segment. The Sold, Pending Sale 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. YTD (Year to Date).
SARASOTA COUNTY MARKET REVIEW NOVEMBER 2013