Moulton Sarasota Real Estate Report
December 2017 – Out Like a Lion
Still deep in the middle of winter, this weather idiom seemed appropriate to describe the Sarasota Real Estate Market’s December performance. With strong growth in sales, prices and pending sales, we did not gently ease into 2018 – we came roaring in!
Recent reports from the Sarasota County Finance Department helped to support my opinion that 2018 will continue to show strong activity in the real estate market. Two highlights were that unemployment fell 15% last year and building permits pulled in December were 50% greater than the same month last year. Much of the new employment occurred in the construction industry. Schools are making every effort to help to train young people in the building trades, but challenged to keep up with demand.
The new tax code is expected to incent small business formation, which the local home building community hopes will grow the talent pool available to meet the ever-rising demand for new construction and renovations.
Michael Saunders recently spoke to a group of luxury realtors previewing a stunning new property. She said buyers, especially at the high-end where the majority of my activity takes place, are seeking “perfection,” and they’re willing to wait for it. Most buyers of premium properties close their transactions without a mortgage and have funds immediately available when the time comes to purchase their “perfect” property.
As new listings of existing homes continue to fall short of demand for high quality construction and finishes in the most coveted locations, more luxury buyers are looking to new construction – whether in a new community or razing an older home so that they can build exactly what they want, where they want it. However, they are having to wait longer for construction to take place and finish due to the lack of available tradespeople in our area.
The other strong dynamic driving much of the demand is the new-family formation in the millennium population. While many would say that Sarasota is an “older” community, recent census reports revealed that Sarasota saw the 9th largest growth in percentage of millennial population in the country, just barely behind expected cities like Austin and San Diego. Millennials now represent nearly 16% of our MSA’s population, and many if not most, were born and raised here.
This group, ages 21-37, is eclipsing the baby-boomers and now represents two-fifths of the working population in the US. These 75 million Americans are now of age and at a point in their professional careers where they are ready to purchase homes. They tend to prefer urban settings and short commutes to work and schools, helping to explain the considerable multi-family infill by developers and renovation of older cottages that we are seeing in the city of Sarasota.
Lest those who prefer not to see any new growth should be alarmed by the strong Sarasota Real Estate Market, that Sarasota County report that I mentioned earlier showed that in 2017 the area saw just a 2% increase in population. The traffic, including increased commercial vehicles on the roads, is in part due to an increase in part-time residents, but is more a result of a strong economy and appears less to be blamed on swelling population.
With the robust economy, increase in household wealth via greater home values and stock market investments, our residents are spending more – on household items, home improvement, dining out, shopping and entertainment. This spending is creating those jobs that brought our unemployment to historic lows, has encouraged fantastic new restaurants and amazing food markets, some of the best healthcare in the country, new retail options and year-round exceptional quality performing and visual arts…further enhancing the region’s quality of life.
Below is a collection of data gathered from a number of local, state and national reports that I monitor.
Sales:
- Total Sarasota Real Estate Market dollar volume of $401.5 million in December increased $89.7 million from prior year and increased $13.7 million over the prior month.
- Broken down, single-family dollar volume increased 13% compared to prior year and condos sales dollar volume was up 64%, as with last month, mainly due to the closings of sales of the new large condominium building, The Vue, in downtown Sarasota.
- The number of properties sold in December including both single family and condominiums was 966 which was 92 more than November and 51 more than a year ago.
- Florida’s single-family sales increased 2.6% and condo sales grew 6% over prior year.
- U.S. single-family sales decreased 2.6% and condo sales were up only 1.7%.
- The 2017 monthly average of total sales is 978 vs last year the monthly average was 952, a similar monthly pace.
- Of the closed sales 87 were for over $1,000,000 or 9%. 30 were houses and 47 were condominiums.
- The increase over prior year for homes sold over $1 million was 36.4% and condos were a remarkable 327% greater (again likely the result of completion of The Vue.)
- All cash sales in Sarasota continue to be strong with 40% of single-family and 63% of condo sales closed without a mortgage. This percentage consistently exceeds trends for Florida and national cash sales (20% in December.)
- Total pending sales of 895 properties that went under contract during December increased by 88 from the same month last year, an 11% increase.
- U.S. pended sales for all housing types grew by just .5% compared to prior year.
- Florida’s total pending sales were less than 1% higher than last year.
- The monthly average of new pending sales in the Sarasota Real Estate Market this year is 1,043 vs. 1,005 in 2016.
Prices:
- In December, Sarasota’s single-family homes were sold at a median price of $285,000 vs. $264,500 a year ago, 7.8% higher.
- The 2017 monthly median price average for houses sold in Sarasota was $267,043 vs. $249,943 last year.
- Florida median price for single-family homes was $244,185, an 8% increase over last year.
- The national median price for existing homes grew by 5.8% to $248,100.
- Condominium median sale price was $250,000 in December vs. $217,000 in 2016.
- The 2017 monthly condominium median average is $225,585 vs. $208,539 in 2016.
- Median price for a Florida condo last month was $180,000 a 7.8% increase over December 2016.
- U.S. median condo price grew 6.4% in December to $236,500.
- The average sale price for houses in Sarasota was $382,597 in December vs. $350,103 a year ago.
- The year’s monthly average price for houses sold is $370,708 vs. $346,232 last year.
- Sarasota’s condominiums sold for an average price in December of $480,239 vs. $321,329 a year ago, again attributable to new The Vue luxury condominium building closings.
- The 2017 monthly average price for sold condominiums is $362,378 vs. $325,802 last year.
- Single-family homes sold at 95.5% of list price, and condominiums sold at 95.7% of the list price. The year to date average for all properties sold is 95.6% of list price at the time of contract vs. the original list price.
Inventory:
- Total available inventory in the Sarasota Real Estate Market has increased by 55 listed properties from November, as there typically is an increase as peak season approaches.
- Since January 1st, inventory has fallen by 194 properties or 4%.
- Currently there is available inventory of 4,401 properties for sale vs. 4,595 at the end of 2016 and 3,598 at the end of 2015.
- The Realtor Association of Sarasota-Manatee reports that there are 4.1 months of single-family homes inventory and 5.3 month’s supply of condominiums, both under the 6-month level considered a balanced market.
- Florida currently has 3.6 months of single-family inventory and 5.6 months of condominiums.
- U.S. inventory of all housing types is reported to be at 3.2 months, 10.3% less than a year ago and the lowest since tracking of the data began in 1999.
- Sarasota County is averaging 1,147 new listings per month and in 2016 it was 1,259.
- Of the total new listings the past month 11% or 122 properties were listed over $1,000,000.
- 24% or 276 new listings the past month were listed for between $400,000 and $600,000.
- 65% of the month’s new listings were listed for under $400,000.
Distressed Sales:
These are sales that are short sales, selling below the underlying mortgage amount, or foreclosed properties, those selling by the lender. This part of the market is becoming so insignificant that I no longer plan on reporting about it in the future.
- For 2017 of the 11,734 properties sold only 453 or 4% were of a distressed sale nature.
- 368 sales were houses and 85 were condominiums.
- 289 houses and 73 condominiums were foreclosed properties.
- 79 houses and 12 condominiums were short sales. Fortunately for the overall economy this process is finally in the country rear view mirror.
- For the most part the prices of these transactions are on the very low end of our overall local market.
Bloomberg News recently reported, “America’s housing market is gearing up for a robust year ahead. Builders are more optimistic, demand is strong and lean inventory is keeping prices elevated.” This seems to be the mantra throughout the real estate expert and economic analyst spheres, as nearly every report released in the last month has said the same.
The dollar has weakened some against key international markets, which is expected to keep our foreign buyers investing in the Sarasota Real Estate Market. It helps our buyers and sellers to have the powerful global relationships that Michael Saunders & Company has forged.
The robust and growing US economy, strong demand from buyers and somewhat weak supply will shape the Sarasota Real Estate Market in the year ahead. High consumer confidence as we have now tends to translate to a strong real estate market.
If you have been considering listing your property, I cannot express how strongly I feel that entering the marketplace at this time of year is most advantageous in that you’re capturing the greatest number of eyes during peak season.
At the same time, if you are a buyer, with prices expected to maintain a healthy pace of appreciation, interest rates set to increase and inventories anticipated to grow only gradually, now is a prime time to select something from the beautiful properties we currently have available in the region.
Seller or buyer, I am eager to assist you in achieving your desired outcomes! Don’t hesitate to call to share your goals and I will help you to determine the best plan for your unique needs.
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