It gives me great pleasure as I write this month’s Sarasota Real Estate Market Report to note that the regional industry continues its steady improvement. U.S., regional and local data are all showing considerable stability. As I have written in previous reports, there is plenty of truth to the belief that real estate is microcosmic, though I also find it important to review data from around the country to establish benchmarks and trends in the housing industry as a whole.
The Sarasota August sales figures have just been released and the statistical data is the best in seven years. The fundamentals including sales, median price, inventory, pending sales, and new building are all reflecting a rising market. One of the most remarkable areas to note is that closed transactions in August were significantly higher than August 2011, 820 vs. 569 – a 44% increase – especially considering that Florida recorded an 11% improvement and the entire U.S. 10%.
Median sales price nationally had its 6th straight month of increase, Florida jumped more than 13% from last year but, interestingly the median sale price for Sarasota’s single family homes in August was slightly off from July, dropping to $169,945 from $178,000. The median price for the past 12 months was $169,000, virtually matching the same time last year, which is not concerning since it reflects market stability. For condos, prices dropped more noticeably, from $176,000 in July to August’s $149,000. The somewhat unusual softening in Sarasota luxury condo sales, along with the higher activity in the movement of foreclosures and short sales at the high end of the market, resulted in the median price falling 15 percent for the month.
My assessment of Sarasota’s variance in median sale price from other parts of the country is that our pace of recovery has been more robust than other areas, and looking at our consistent and strong improvements over many months of the last year, I believe it reflects a condition that shows a steady and constant trend. Additionally, condo prices tend to fluctuate more month to month and tend to be affected by the volume of higher priced properties sold in that month.
Inventory in the region continues to be a very real concern. The available listings decreased yet again last month, with this year already experiencing a 21% drop since the beginning of 2012 and more than 26% since last year at this time. Statewide inventory has fallen just under 40% during the same period and the U.S. real estate inventory has been reduced by about 18% in the year. With our Sarasota’s overall inventory of available properties sitting at 4 ½ months, which is near a 10 year low, the topic of inventory will be central for months to come.
As has been stated in many past reports, a 6-month market is considered balanced 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 an 11 month inventory and over $1,000,000 the available inventory is a 13 month supply. In higher priced categories, a market equilibrium is measured at a considerably higher months-of-inventory level, with experts suggesting anywhere between 12 to 18 months as being the norm, so we are nearly at the bottom of that range.
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. For properties listed above $1,000,000 only 2% or 12 properties are listed as a Distressed Sale in Sarasota. Of the sales year to date, 33% were a Distressed Sale for properties priced under $1,000,000 and only 5% or 11 transactions were Distressed Sales for properties over $1,000,000. The Distressed Sale inventory is drying up especially in the luxury market segment.
A continuing improvement in the number of mortgage delinquencies, estimated to be almost 11% fewer nationally than a year ago is a positive sign. Concerns of a flood of underwater (yes, pun intended) homes entering the market has thankfully not occurred, and instead we have begun to see an easing of troubled home loans allowing for a more gentle absorption of those properties. Add record low mortgage rates, more affordability of homes in general, increased buyer confidence, and strong builder activity, and all signals point to a solid 3rd quarter and eventual healthy end to 2012.
As reported, inventory is tight so if you are considering selling this fall could be a great time to list your residence, and if you are considering buying now is the time to get off the fence because, as we enter our peak selling season in the months ahead, it is my expectation that prices in many neighborhoods are going to rise.
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).