The Moulton Sarasota Real Estate Report – May 2014
The “season” of summer has just been turned on the calendar, however the Sarasota Real Estate Market starts its summer in the month of May. Our snowbirds mostly leave in April, tourist activity is traditionally light, and the activity we see often sets the pace for the months ahead. Based on my market research, I believe that May2014 data reflects stability and continued strong demand.
Last year our region set sales records month after month, so when we see market indicators such as 17% more inventory, distressed property sales falling by 14.3%, and pending sales increase 16.9% all compared to May 2013, I read our market as growing and transitioning in ways that can generate long-lasting strength.
As we near the mid-year point, comparing the first five months of this year to last shows some interesting variances. Inventory has fallen 11% this year-to-date vs 16% in 2013, months of inventory this year has dropped 37% and last year 42%, and the most significant change has been in the median prices. Last year prices rose 17% in the first five months and this year they have moderated a bit more, increasing 5%, which I believe to be a much healthier and sustainable pace.
What we still see a critical need for are new condominiums. Though one project was cancelled last week due to zoning concerns, several others are well on their way to construction. Reservations for residences in the new projects have been impressive. Once inventory of new condominiums is ready for occupancy, I believe that our market will achieve new records in number of sales and price, and reach definitive stability.
May’s softer closed sales, 6.5% less than last year, was in part due to the drop in distressed property sales. The number of distressed properties sold last month fell by 14.3% compared to May 2013. The national average was 11% of all sales. At the market’s worst in 2011, 50% of the homes sold were distressed properties, a far cry from last month’s 19% of total sales. Sarasota has been named as one of the areas with the highest number of short sales in the country, it appears to me that despite the experts suggesting that we would suffer for years from the so-called “shadow inventory,” that part of our market remains stable month-to-month in relation to percentage of inventory, median price and pace of absorption.
The remarkable increase in pended sales in the month of May of 16.9% over prior year is even more noteworthy when you compare it to the national decrease of 5.2% year-over-year, according to data reported in TrendGraphix. This forward looking statistic is especially important as we enter our softer summer months in the Sarasota Real Estate Market. Knowing that demand and activity is still pacing ahead of last year, and that we have a hearty number of sales already on the books for June is a good indicator of strength in our housing market.
The median sale price of all Sarasota Real Estate last month grew 5.5% over prior year with single-family homes remaining nearly equal to last year and condominiums rising 6%. Sale prices in Florida increased 4.3% and the national growth was reported to be 5% over prior year. In a 12-month look at our Sarasota median prices, single-family homes have increased 15% and condos have risen 8.8%.
In the market in which I participate in the most sales, above $700,000, many interesting statistics are emerging. During the height of the housing crisis Sarasota had more than 50 months of supply at the luxury price point. Inventory of luxury properties has fallen almost 25% since that time, and is well below the level analysts believe to be a market balance in that category. Since last year Sarasota’s median price of luxury properties has risen 6% and is 20% above the market’s bottom, days on market have fallen by 17% in the last year and 46% over the last four years, and the number of luxury sales of the month’s total sales climbed 25.8%. Nationally, homes sold in the luxury category represented 4.5% of the market. In Sarasota, our luxury sales represented 7.4% of all sales last month.
Overall Sarasota housing inventory is currently sitting at just 3.9 months. Market experts believe 6-months is the barometer of the balanced market. Since the low point of our market during the recession, Sarasota’s inventory has fallen almost 40%. Housing under $500,000 has just three months of supply, $500,000 to $1 million is sitting at eight months and properties over $1 million have 12.5 months of supply.
New construction underway of single-family homes and condominiums is urgently needed, and as these new properties become ready to sell I believe we will continue to have the demand to absorb everything coming online and eagerly look forward to reporting strong sales for the balance of 2014. My projection for the next several months is a healthy and sustainable pace of growth, better balance between buyers and sellers, and continued market stability.
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.
SARASOTA COUNTY MARKET REVIEW MAY 2014