Hurricane Irma and Holiday Trigger Lean Sales Volume
The Sarasota Real Estate Market suffered a considerable impact from many fewer business days in September as a result of both Hurricane Irma and the Labor Day holiday. Though September is typically a softer month than others throughout the year, when comparing sales to the same month last year, the area saw an 18.5% decline in closings. The Realtor Association of Sarasota and Manatee calculated that the region had 20% fewer business days compared to other months this year.
Despite the substantial decrease in number of units sold in the Sarasota Real Estate Market, condo sales dollar volume was just 2% behind last year, and single-family was 13.5% behind prior year. At the same time sales weakened, prices maintained their climb with single-family home prices growing 8.4% and condominiums up 11.2%.
With homeowners focused on hurricane preparations, evacuation plans, and eventual clean-up, significant business disruptions caused by loss of power and technology, need for re-inspections of homes under contract after the storm passed, and general angst not only caused sales to lag, but also new listings and pending contracts to be impacted. Single-family listings were almost 37% fewer than previous year and condos saw 18% less units come to market.
Current inventories of single-family homes and condominiums in the Sarasota Real Estate market are at the lowest levels in more than a year. Homeowners who were unable to get their properties listed in September will hopefully go forward with their plans to sell and help to restock our now tight supply.
Pending sales is one of our best forward looking indicators. In September new contracts signed were almost 30% behind last year. However, it is important to note that while this may affect sales in the next month or two, demand has not waned and those same buyers are still in the market for properties, so I do not expect future sales to fall measurably as a result of the hurricane.
Florida and Texas represent nearly 20% of all real estate sales each month, so with the states so severely impacted by Harvey and Irma, both August and September saw total U.S. sales slide. The National Association of Realtors reported that September inventory and pending sales nationwide also declined, likely attributable to the storms.
Looking at the whole of The Sarasota Real Estate Market and comparing to national and state data, the following are some of the key points that I assimilated from the many resources I review monthly.
- Total sales in The Sarasota Real Estate Market in September decreased by 143 sales to 769 from prior year, and decreased 224 sales from August.
- Total dollar volume decreased $30.8 million from prior year and fell $89.3 million behind the prior month.
- Single-family home sales in September of 529 were 106 less than a year ago and decreased by 196 sales from August.
- Florida’s single-family sales fell 20.4% compared to last year.
- U.S. sales also fell and were 1.2% below prior year.
- Total number of condominium units sold of 240 in Sarasota in September was 13% lower than a year ago, and decreased by 28 sold properties from the prior month.
- Florida condo sales were 15.9% lower than September 2016.
- Condo sales nationally declined 3.2% compared to last September.
- The 2016 monthly average of single family sales was 672, and for this year the monthly average is 679, an almost identical pace. For condos, the average monthly sales in 2016 were 308, and this year it is 325.
- All cash sales in Sarasota continue to be strong with 40% of single-family and 56% of condo sales closed without a mortgage. This percentage consistently exceeds Florida and national cash sales trends.
- Pending sales of 452 homes that went under contract during September decreased by 25% from the same month last year, which as noted earlier is a direct result of the large September storm.
- Condominium pending sales were also significantly down with a 39% decrease in properties going under contract in September compared to prior year.
- The monthly average of pending sales this year is 732 for houses vs. 725 in 2016, and 348 for condos vs. 334 in 2016.
- U.S. pended sales fell 3.5% compared to prior year.
- Florida’s pending sales saw a 30% drop in properties going under contract in September when compared to prior year, similar to what we experienced in our region.
- In September, Sarasota’s single-family homes were sold at a median price of $269,900 vs. $249,000 a year ago, 8% higher.
- Florida median price for single-family homes was $239,900, a 7.6% increase over last year.
- The national median price for homes was $246,800.
- The median price in September for a NEW home in the U.S. was $319,700.
- The 2016 monthly median price average for houses sold in Sarasota was $248,167 vs. this year it is $262,836.
- Condominium median sale price was $220,000 in September, the 2017 monthly average is $221,449 vs. $209,058 as the 2016 monthly average.
- Median price for a Florida condo last month was $173,000 an 8.1% increase over September 2016.
- U.S. median condo price in September was $231,300.
- The average sale price for houses in Sarasota was $353,869 in September vs. $340,938 a year ago.
- The year’s monthly average price for houses sold in 2016 is $350,914 vs. $363,363 year to date.
- Sarasota’s condominiums sold for an average price in September of $314,206 vs. $277,738 a year ago.
- The 2016 monthly average price for sold condominiums was $330,575 vs. $314,206 this year.
- Single-family homes sold at 95.7% of list price, and condominiums sold at 94.2% of the list price.
- Total available inventory in the Sarasota Real Estate Market is close to the same from August and a year ago. Consistency of available inventory is a good indicator of a stable market.
- Since January 1, 2017, inventory has fallen by 771 properties or 17%.
- For single-family homes, Sarasota’s inventory has decreased by 521 properties since the beginning of 2017.
- Condominium inventory in Sarasota has decreased by 250 properties since the beginning of the year.
- The Realtor Association of Sarasota-Manatee reports that there are 3.7 months of single-family homes inventory and 4.5 month’s supply of condominiums, both under the 6-month level considered a balanced market.
- Florida currently has 3.8 months of single-family inventory and 5.5 months of condominiums.
- U.S. inventory of all housing types is reported to be at 4.2 months, 6.4% less than a year ago.
- Sarasota County averaged 1,162 new listings per month in 2016 and this year the nine-month average is 1,227. In September only 759 listings came on the market, I am sure a direct result of the storm.
- Currently there is available inventory of 3,824 properties for sale vs. 4,595 at the end of 2016 and 3,598 at the end of 2015.
Homebuilders remain steadfast in their confidence that the market for newly built homes will continue to be strong. Though material and labor shortages exist and costs are rising, a recent survey by the National Association of Homebuilders indicated developers believe they can maintain their pace of building and deliver much needed new inventory to market.
A recent survey of more than 100 real estate experts, economists and market strategists also reflected sentiments of a very healthy housing market. They project a strong finish to 2017, sales increase in 2018 of more than 5%, and price increases of about 6% on the national stage. Over the next five years the same group expects national average home value appreciation to grow 3.6% annually and cumulative appreciation for homes of 18.4%
October activity in my business has been as strong as I can remember in recent years. A high level of activity from eager buyers and many new sellers give me confidence that in the season ahead the Sarasota Real Estate Market will continue this year’s pattern of sales and price growth.
If this is your time to sell or buy a new home or condominium, give me a call and let me help you achieve your real estate objectives.
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