The Moulton Sarasota Real Estate Report – May 2015
In my April month-end report I noted that as the peak spring season sales were winding down the Sarasota Real Estate Market continued to set a new record for total sales, we saw median prices grow and pending sales were also near record levels for the month. And while I predicted another strong month ahead, I couldn’t have imagined a May with as many important market metrics again hitting such heights.
The Sarasota Real Estate Market transactions in May were the second highest in the last 15 years, coming in just a handful less than recorded in May 2013, which was our record setter. Trendgraphix reported that pending sales, our forward looking barometer, reached a 15 year high for the month of May, beating last year’s new record by an impressive 11%. Sarasota’s median prices for both condominiums and single-family homes rose nearly double the State of Florida’s average and that of the entire nation!
National economists and industry strategists have opined that the national real estate market is 2-3% overvalued, a position they believe is healthy. When you compare it to the market in 2006 when the same experts declared the market was 26% overvalued, it seems that the current pace of acceleration in the price of homes is the type of growth that is sustainable.
Now that we have moved into summer, our traditionally slower season, I do expect some less spectacular growth than we have seen these last several months, but I do foresee continued momentum in a year exhibiting every sign of achieving new records, but doing so in a measured and sustainable fashion.
May Market Data
Though in last month’s report I suggested that our shoulder season would continue to be “hot,” even I was a little surprised to see May come in ahead of last year’s robust action. Since the market low in May of 2007, the number of properties closed in the Sarasota Real Estate Market has more than doubled.
- Total sales in May in the Sarasota Real Estate Market increased 7.5% from May 2014.
- The national picture finally warmed up with sales besting last May by 9.2%.
- Distressed sales (short sales and bank owned) as a percentage of total sales have continued to fall. In May those sales were 15.9% of total sales in Sarasota, considerably below the 50% mark at the bottom of our housing market. Most of the sales of distressed properties are in price points below $500,000.
For another consecutive month, the Sarasota Real Estate Market experienced extraordinary activity for properties going under contract. While it dropped a little from April’s peak, which is expected in our shoulder selling season, according to Trendgraphix year-over-year showed impressive growth, the 2nd highest in 15 years. This data is one of our best devices to project future sales activity, and to have such a strong transaction flow late in our peak selling season gives weight to my expectations for a summer “heatwave!”
Inventory…inventory…inventory. Without an increase in the number of properties for sale, prices will continue their climb. May’s median price growth in the Sarasota market is quite spectacular, perhaps reflecting a new sense of urgency from prospective buyers. Days on market is contracting, as are list to sale prices. As long as our inventory remains in its compact state, there is no other probable result than rate growth. However, I caution hesitant sellers who have not listed their properties, there is no guarantee that prices will continue double digit growth. Market experts are predicting much more moderate price increases as the year progresses.
- Median price for single-family homes was $230,000 a significant increase over last May’s $191,500 – 17% higher.
- Florida’s median home price was $200,000 last month, an 11% increase over prior year.
- Median price for all May property sales in the nation increased 6% over May 2014.
- Condominium median prices were $210,000 vs. $175,000 a year ago – 17% higher.
- In comparison, Florida’s median condo price is $159,000, a 9% increase.
- The average sale price for houses In Sarasota was $345,956 in May vs. $298,664 a year ago, and they were sold at 94.1% of the list price.
- With condominiums, the average sale price was $317,371 vs. $289,450 a year ago and sold at 93.5% of list price.
- The average sale of all May transactions in the U.S. was $337,000.
- 52% of the closed sales were paid in cash.
Inventory…inventory…inventory – yes, it bears repeating. The Sarasota Real Estate Market, especially in the most desirable locations nearest the coastline, is desperately low on listings. If you are one of those who has yet to put your property on the market and your goal is to buy something different for yourself, don’t forget that the longer you wait, the less chance you will find the property that meets your “wants” – and within the price range you are budgeting.
- In May, Sarasota Real Estate inventory fell 9% from month-end April, which is a 14% drop from the end of 2014.
- Total inventory in the area is currently at a 3.6 month supply, well below a balanced market, which is defined by a 6-month supply of inventory.
- Properties under $500,000 have just 2.9 month’s supply.
- In the category $500,000 – $1 million, inventory is 7.4 months.
- For properties over $1 million, there is a 13-month supply.
- On a national scale, single-family inventory has a 4.7 month supply and condominiums have a 5.8 month supply. In comparison, this further underlines our region’s tight inventory situation.
- The distressed inventory is only 8.6% of the total available inventory, compared to 17% last year and 50% in 2011.
- The national distressed inventory percentage of total sales was 10% last month.
Over these next several months it is easy to predict our typical Sarasota summer temps will produce a lasting heatwave, and I also have confidence that our real estate market is going to maintain its heat. With new construction of many projects reaching either full-reservations for their units or readying for closings and new resident move-ins; the strong international traffic that our summers typically provide; the vast population of baby boomers ready to plan for their retirement; many homeowners return to equity in their current homes freeing them up to either purchase vacation homes or “move up”, the summer skies ahead look sunny to me!
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 May 2015