There are few real estate experts, analysts, reports, statistics or other evidence of anything other than a continuation of the Sarasota Real Estate market recovery. In fact, virtually all information being released for the nation is pointing to sustainable housing market revitalization.
In reviewing my last year of monthly Sarasota Market Reviews and the research and data I used to establish my opinions and forecasts, all of the indicators used to measure the market’s stability have steadily and progressively moved forward. Based on this wide analysis, along with another month of higher total property sales, pending sales, and median sale prices; a continued decline in inventory; and progress in new home building; I am convinced that the Sarasota Real Estate market has established itself as underway in recapturing its healthy vitality of the past.
The Sarasota September sales figures locally, regionally and nationally have just been released and the statistical data continues to be very positive, with Sarasota’s data reaching some of the best results for any September since 2005, during the height of the property boom. One strong showing came in total closed transactions in September, which were 7% higher than September 2011. In fact, in every month of this year sales have exceeded the prior year’s transactions.
Sales prices continue to inch higher, as they have for every month of 2012 so far. According to data that I reviewed, Sarasota’s closed transactions for 2012 are 13% higher than last year at this same time. Industry analysts reported that the national home prices are now at a 20 month high. The median sale price for all Sarasota transactions last month rose a total of more than 10% over last year per data revealed by Trendgraphix. The Sarasota Association of Realtors reported that the median price for single family homes had a strong improvement of 11% for the first nine months of this year and condominiums have grown in median price by about 8%.
Declining inventory in the region continues to be a considerable concern. Available listings decreased slightly yet again last month, with this year already experiencing a 21% drop since the beginning of 2012. The current inventory has not been this low since 1998. Over four years ago the inventory was over 9,500 units and properties for sale today sits at just 3,400.
One of the most troubling features of the inventory issue continues to be the limited number of new homes available. Many would-be buyers have put back into action plans to purchase that were put on hold during the recession, and a large percentage of these are looking for state-of-the-art design and construction and never lived in residences. The Census Bureau reported recently that national housing starts are up 38% over the last 12 months, and though that sounds very impressive, demand is still outpacing new product by a large margin. Until the construction industry is able to find available financing and a full workforce, the imbalance between buyers and available new properties is expected to continue.
Statewide inventory in all price points and types of housing has fallen just under 40% during this year and the U.S. real estate inventory has been reduced by about 18% for the same period. With Sarasota’s overall inventory of available properties sitting at 5 months, which is near a 10 year low, the apprehension of how to meet buyer demand will be a central issue for months to come.
As has been stated in many past reports, a 6-month market is emblematic of a balanced market for buyers and sellers. There are now just 3 ½ months of inventory for properties listed under $500,000. In the segment between $500,000 and $1,000,000, there is a 12 month inventory and at the luxury level over $1,000,000, the available inventory is a 20 month supply (higher priced categories equilibrium is usually measured at a considerably higher months-of-inventory level, with between 12 to 18 months as being the norm.)
Of the Sarasota Real Estate current listings, 16% are classified as Distressed Sales, meaning they are either listed as a Short Sale or as a REO or bank owned property. In Sarasota only 14 properties listed above $1,000,000 and only 24 properties priced between $500,000 and $1,000,000 are identified as a Distressed Sale. Overall inventory of distresses properties has declined 10% since the end of last year. Of the sales year to date, 32% were a Distressed Sale listing and only 22 transactions were Distressed Sales for properties over $1,000,000. As noted in prior reports, the distressed inventory at the luxury level is relatively small and is not influencing sales as much at that price point.
The final area I reviewed this month was in pending sales, those that are under contract but not yet closed. As was noted several months this year, pending sales in Sarasota’s real estate market once again rose, and quite considerably, too! According to a recent release from Michael Saunders and Company in an article titled “Our Market’s Recovery,” the entire region of Sarasota, Manatee and Charlotte Counties saw an increase of pending contracts of 31.5% in September, and especially noteworthy, of those contracts over $1 million, the increase was 100% better than last year. Monitoring pending sales is very important as it offers us a glimpse into trends for the coming months.
After a stronger summer selling season than I can remember for some time, and when reviewing the consistent trends noted in this article, it is my sense that we have entered a period where the market is ripe for sellers. Whether a homeowner’s goal is to downsize, move up, relocate out of the area, or consider renting while the market finishes its stabilization, conditions as we enter our peak selling season are ripe for a sale. Industry experts are expecting continued small price growth for another year or two, however buyers are in our market and ready to make a purchase now. Why wait?
The following statistical data is provided through the Multiple Listing Service (MLS) of the Sarasota Association of Realtors by agents within our local board. These statistics do not take into account transactions of agents within Sarasota County associated with other boards. The table summarizes what happened in each price segment. The Sold (Closed), 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. YTD (Year to Date).