The Moulton Report for February 2012
As reported in my most recent articles, the 2012 winter selling season continues in a very positive way and the Sarasota real estate market is showing strong signs of sustained recovery. Whether it is stabilized prices, more concessions on the part of sellers hungry to move their properties, record low interest rates, rising sales and lower inventory, or a stronger tourist season that are leading to more balanced conditions, there is no question that the market has been experiencing elevated activity. As I discuss the region’s energy with my peers, we mutually agree that the sentiment from interested buyers is that they feel that if they do not take action quickly they may miss an incredible opportunity. So, in addition to strong statistical data, which you can see included at the end of this report, we are experiencing a sense of urgency from purchasers.
During the first two months of this year our closings were marginally behind last year’s pace. However, when analyzing all statistical gauges such as sales, inventory, and pending sales together, I feel confident that we are on pace to not only just maintain the growth we established last year but, also to continue advancement.
Inventory continues to be a hot topic, as compressing product will inevitably put upward pressure on prices. The overall available inventory is steady with the end of 2011, yet has declined over 20% since the end of 2010 and last month there was a 10% increase in pending sales over February 2011. The industry has established 6-months of inventory to be a healthy balance between a buyers and seller’s market. Lower inventory numbers indicate a trend toward a seller’s market for properties priced below $500,000, and for higher priced properties 10 months of inventory is considered a neutral market.
There are now just 5.8 months of inventory for properties listed under $500,000. In the segment between $500,000 and $1,000,000, there is a 15-month inventory. The inventory of available luxury properties over $1,000,000 has risen 12% from the end of 2011. I perceive the increase in luxury inventory to be a sign that more sellers are entering the market both because they believe now is the right time to sell and also because of the peak tourist season being upon us bringing more buyers into the area.
With the recent monthly release by virtually every national market data report showing sales growth, positive consumer attitude, builder confidence, ability to absorb “shadow inventory”, narrowing margins between listing and contract price, and compressing inventory, and in light of our region’s extraordinary desirability, it is difficult not to be optimistic about the Sarasota real estate market’s recovery.
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).