As the Sarasota sun sets and a New Year begins, I once again take time to reflect on how fortunate my wife Katie and I are to call Sarasota home! Family, friends, colleagues, clients and the thousands of friendly faces all throughout the area make Sarasota a wonderful community, and one which I am so grateful to be able to introduce to prospective new residents. From the beaches to the polo fields, grouper sandwiches to Mote caviar, golf greens and beautiful boating outings, extraordinary performing arts and visual exhibits to the beauty of Selby Gardens, music of every kind and the gentle sound of waves lapping at the shore, every day in Sarasota is a gift!
The collective data from local, regional, state and national sources indicate that year-end 2014 will reveal a year in which recovery is now in the rear-view mirror and stable and sustainable growth lies ahead. In particular, the Sarasota Real Estate Market had an extraordinary year, and I believe that our respective housing fundamentals are primed ensuring that 2015 will be another year of healthy growth.
November Sarasota Real Estate Market results once again showed sustainable growth. 2014 year-to-date has had a 4.1% increase in sales, inventory is still inching higher, prices in all categories are rising, and distressed inventory declines continue. This past month’s data on pending sales is a critical housing market indicator as it helps to project sales pace over the next two months. One of our valuable resources, TrendGraphix, reported that pending sales in the Sarasota Real Estate Market rose 7.6% over the pace set last November. In the luxury market of properties, which is above $1,000,000, pended sales in November increased 17.9% over 2013.
With national consumer confidence growing driven by realized and projected household income and equity growth, and the recovery of economies in our key business driver markets, I believe that the Sarasota Real Estate Market is well-positioned for strong peak selling season in the months ahead.
Sarasota Market Highlights
Sales Year-to-date sales in Sarasota have exceeded 2013 by 4.1%. In November sales had a bit of a lull, falling 6% from sales recorded in November of 2013. However, if you use a rolling 12-month record of Sarasota sales, the region is 3.6% higher this year than last. Average sales in the first five months of our year, considered Sarasota’s peak selling season, generally account for 57% of total annual sales. In the market where my sales concentration lies, properties over $500,000, sales are reported to have increased more than 15% over prior year. Given the strong pending sales pace set last month and the higher level of buyer activity that I am already seeing this early in the season, I am confident in projecting that our first-half 2015 will produce continued growth.
Prices Median sale price of all transactions in the Sarasota Real Estate Market in November was reported by TrendGraphix to be 10% higher than previous year in all categories and price points combined. Using a 12-month cumulative average, which lessens the sharper impact of seasonal peaks and valleys, the Sarasota market has seen single-family home prices rise 18% and condominiums 12% over prior year 12-month average. Interestingly, once again visiting the luxury market, prices in November fell about 4%, which I suggest ties to limited new inventory in that price point. With new development underway creating more inventory for our buyers to choose from, I project in the next year this area will see healthy improvement.
Inventory For all of the last two years, inventory has been the hottest issue for Sarasota Real Estate. As mentioned above and in many of my previous posts, new construction is robust, and in all price categories. Demand is more than ample to absorb what is currently underway, however even with the heightened activity, I do not believe that there will be any great relief in the year to come. The measure of a balanced market between buyers and sellers of six-months is likely not going to be achieved for at least the foreseeable future. Sarasota’s inventory of housing units has fallen 11% since the beginning of the year and is now at just four-months of inventory. Listings under $500,000, where Sarasota has the greatest dearth of supply, have fallen 19% since last year. In the price point above $500,000, months-of-inventory has fallen 12% since last year at this time.
After reviewing all of this year’s data for the Sarasota Real Estate Market, studying statistics and analysis from the national financial and housing market experts, and using my more than 30 years of local knowledge and experience, I feel very confident in projecting that the steady momentum we have seen in 2014 will continue through 2015. Of course, there are always geopolitical situations that can create considerable interruptions and even setbacks. With the progress made these last few years during the economic recovery, Sarasota has healed exceptionally well and is in an especially strong position for further acceleration.
The Federal Reserve has reported that household net worth in the U.S. has risen 6.4% since last year. The majority of net worth rests in the top 10% of all households, which are the prime market for Sarasota Real Estate who are seeking vacation homes or homes for future retirement. There has been a drastic reduction of underwater homes in the key feeder markets for buyers in our region, which is also adding to the potential purchaser pool.
Housing prices have increased to a more normalized level causing inflated prices from the enormous volume of investor purchases to wane. Distressed sales as a percentage of all sales in the U.S. have fallen 35% since last year. For many who did experience a distressed sale, the penalty period for purchasing a new home has passed and the pent-up demand from those aspiring home buyers will be influential in the year to come. Rental pricing is rising at its fastest pace in seven years motivating fence-sitters who chose this alternative due to the advantageous rates these last several years to reconsider their long-term housing objectives.
All of the metrics support the suggestion by me and virtually all of the market analysts whose conclusions I respect, that the Sarasota Real Estate Market is indeed primed for continued sustainable growth in 2015. I look forward to working with you, your family, friends and colleagues with any home buying or selling needs in the next year!
Wishing you a year ahead filled with hope, happiness, good health, peace and prosperity! Cheers!
The following statistical data is provided through the Realtors Association of Sarasota for properties throughout Sarasota County. The table summarizes what happened in each price segment.
SARASOTA MARKET REVIEW – NOVEMBER 2014