National GDP reports and consumer confidence levels were released over the weekend. One area where experts noted there was a considerable impact on our economy was from residential home building, said to have increased 19.1% over prior year and the largest increase in two years.
Today’s local news reported that building permits for single family homes in Sarasota County rose 60% in the 1st quarter of 2012 – now at the highest level in four years. As has been discussed in several of my posts over the last few months, buyers are becoming frustrated at the narrowing supply of move-in ready homes. At the middle-high end of the market, buyers want newer or newly renovated homes and they are becoming harder to find as the quality product is sold off. Data reflects that there is only a two-month supply of “finished-vacant” property, there is clearly a trend toward market recovery.
In the Sarasota/Manatee/Charlotte region, available properties for sale dropped 23.4% from a year ago. With a statistic now of only 5.5 months of supply in our region and the last few months continuing to show improvement in sales and reductions in inventory, now is the time when we should see appreciable increases in prices. With consumer confidence recording its highest level in a year, I do not see a measurable slowdown in buyer demand for our available homes.
An interesting dynamic in creating our “new” balance in inventory is that, though shadow inventory continues to be an important piece of the recovery puzzle, new home stock being added to the market was limited these last several years. This regulation of new product has lessened the fears of a prolonged “bottom” to the market. With inventories of foreclosed or distressed properties fewer and less influential than experts predicted it is now expected that the balance between available buyers and sellers has nearly stabilized .
In the high-end of the market where the majority of my transactions take place, the inventory is moving toward one of the lowest points since the real estate boom began back in 2004. At 13% less than a year ago and with 25% more sales and nearly 16% more contracts in hand, this segment is expected to see some strong upward movement in price as here inventory of high quality homes is declining.
While the traditional peak spring selling season comes to a close, I am convinced that our international visitors and growth in regional population will help to buoy our improving market through the balance of the year.
I encourage you to peruse the attached TrendGraphix Market Report provided by Michael Saunders and Company. Not only is it filled with many important statistical evidences of our recovering market but, as a proud member of the team, I would particularly like to bring your attention to pages 7 and 8 where the MS&C market share is revealed. With the highest market share in the combined region of Sarasota/Manatee/Charlotte, I say BRAVO to Michael and all of our associates for maneuvering through these last several difficult years with skill, dedication and the strength that comes from the region’s finest broker leadership.