While the January national median price increase over prior year was 8.2%, the Sarasota Real Estate Market eclipsed that mark by well over two times as much price growth, and by some estimates as much as triple the U.S. median sale price growth. Over the last many months I have reported that several factors have and would continue to place considerable upward pressure on prices – existing and new inventory shortage to meet demand, an enormous reduction in distressed properties feeding the lower ends of the market, a limited number of listings of higher quality well-located properties in good condition, record-breaking tourist activity in the area, and strong interest from international buyers as just some of the factors accelerating the region’s price appreciation higher and faster than most other areas of the country.
The number of sales in the Sarasota Real Estate Market fell slightly in January compared to the same month last year, and like the accelerating prices, this trend is mostly attributable to the continuing dearth of supply, which just may be showing signs of easing. As you’ll read in this report, inventory increased this month, with levels currently reaching what is considered a balanced market between supply and demand, however one month does not a trend make and only time will tell if this pace of new listings will continue.
My peers and I will continue to encourage our procrastinating potential sellers to enter the market, as this could be the best time to make their move, especially if the plan is to move up or change lifestyle. Prices will continue to rise and waiting only makes the next purchase more costly. As a reference for my potential sellers, you’ll find HERE a link to a recent article I wrote with suggestions to sellers readying their home for listing.
The following data reflects reporting through the local, state and national realtor associations, as well as a number of other statistical providers nationwide. There are never a shortage of data and expert opinions, as the real estate market represents one of Florida’s strongest sectors of the economy, and it will always have the economists and media’s attention!
January Market Data
Sales
As noted in my opening remarks, growth in numbers of sales in the Sarasota Real Estate Market were nearly equal to last year. Closings of luxury properties (those over $1 million), where the majority of my activity occurs, were up 14% over prior year. Also notable is that number of days between listing and sale for luxury sales fell by 30% and closed for 93% of list price.
- In Sarasota, January single-family closings increased 1.2% compared to January 2015. Condominium sales fell approximately 5%.
- Compared to our record-setting December, sales decreased 21% and condos decreased 19%. While the statistics appear significant, both of these are well within the average range experienced over the last five years for the December-January time frame.
- Florida’s sales volume in January was very similar to what we saw in the Sarasota Real Estate Market.
- On the other hand. U.S. sales saw the biggest monthly gain in 2½ years. However, analysts are projecting just a 2.5% increase in sales for the year nationally, while our region is expected to see growth as much as 5% over prior year.
Pending Sales
According to the Realtor Association of Sarasota Manatee, the pace of contract signings in January was up 20% from December but down 24% from the previous year. This is a metric that is important to monitor since it tends to be a predictor of closings over the next 30-90 days.
Sale Prices
Escalating prices are the hot topic these days. Questions are being asked by financial experts as to whether we have reached an unhealthy pace. In my opinion…not yet. It is important to remember that during the economic downturn the Sarasota Real Estate Market was reportedly one of the hardest hit in the nation. Median prices fell 60% in our region. Still today our median prices are more than 30% below the peak in 2006.
- In January, single-family homes saw a median price of $230,500 vs. $190,000 a year ago, an increase of 18%.
- Statewide, median price increased 13.7% compared to the same month in 2015, bringing single-family homes to a median price of $199,000.
- One of our biggest competitors for buyers, Naples, has a median single-family home price of nearly TWICE the price of a Sarasota home.
- S. median price increased 8.3% for the month for a total of $215,000.
- Sarasota’s condominium median sale price for the month was $218,000 vs. last year’s $185,000, another almost 16% increase.
- Florida’s median condo price was $152,000, up 10.9% over prior year.
- Median price for U.S. condo sales was $203,900, an increase of 7.4% over January 2015.
- The average sale price for houses in Sarasota was $341,644 in January vs. $286,887 a year ago, a 19% increase. The majority of this difference took place in the lower price points, as the volume of distressed properties has fallen substantially. Sarasota homes sold at 94.4% of the list price.
- In my luxury domain, average sale prices increased 7% compared to last year.
- With condominiums, the average sale price was $313,861 vs. $263,754 a year ago, a 19% increase and they also sold at 94.4% of list price.
- 54% of the closed sales were paid in cash, broken down it was 71% of condos and 46% of single-family homes.
- Nationally, cash sales made for 26% of all transactions.
Inventory
In January, Sarasota Real Estate inventory increased 14% from December month-end. Sellers are feeling good about the possibility of an increased list price and the low inventory levels. Though this is the first month in a long time that inventory has seen such a significant rise, it is hard to tell whether the pace of new listings will be here to stay, or is simply a New Year anomaly. Four full years into the housing recovery builders are still playing catch-up to meet demand for new homes. Hopefully the increases in housing prices will continue to encourage activity in new construction and help to offset rising labor and product costs.
- Total inventory in the Sarasota Real Estate Market is reported to be at a 6 month supply, the first month in a long while where we are at a balanced market, which is defined by a 6-month supply of inventory.
- Properties under $500,000 have a 4.4 month’s supply.
- In the category $500,000 – $1 million, inventory is 12 months.
- For properties over $1 million, there is a 26 month supply based on January’s closed sales.
In an interesting generational economic dynamic that is sure to keep the real estate fires fueled for years to come, Gen-Xers have entered their prime earning years and are ready to move up to their next homes, possibly freeing up the huge Boomer population that is looking to downsize or relocate. The Gen-X homes then become available for the first-time buyers in the Millennial group. In a recent conversation with a colleague, I heard a curious statement about this subject, “The boomers haven’t taken their last breath and the Millennials haven’t taken their first.” Why is this important? Just another supporting element in my confidence that the Sarasota Real Estate Market will maintain its current strength.
Back to the subject of this issue of The Moulton Sarasota Real Estate Report – considerable acceleration of home prices in our region. Without consistent inflow of fresh inventory, and with the seemingly boundless demand, I see the trend of escalating prices as continuing through this year. It is true that our area took one of the biggest declines in prices during the recession and moderate price growth is healthy for the market, but another year of double-digit growth could also begin to erode our competitive position with the communities who vie for our same buyers.
According to Metrostudy, a national data intelligence resource, the Sarasota Real Estate Market is the #3 top market in the U.S. in terms of real estate health and the new homes sales forecast. The tourist seasons have become less cyclical with even the historically soft summers producing strong sales activity. Sarasota’s cultural community continues to be recognized as one of the best in the country, there are myriad ways to enjoy our coastal beauty, parks and preserves abound, there are endless options for year-round active outdoor experiences, and amazing dining and shopping choices. These factors and more will always make our region attractive to new residents and real estate investors. And though there is a likelihood of a mild recession and global economic slowdown over the next couple of years, experts and market commentators say that the Sarasota Real Estate Market will still experience sustained growth and appeal to the appetite for real estate investment and home ownership.
With last year’s sales activity averaging more than 30 closings a day in Sarasota, and price increases expected to accelerate further, buyers and sellers need to consider the potential cost of waiting to make their move. Isn’t it time for you to make yours?
The following statistical data is provided through the Realtor Association of Sarasota and Manatee for properties throughout Sarasota County. The table summarizes what happened in each price segment. The Sold, Pending 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 at the report’s month end.
SARASOTA COUNTY MARKET REVIEW – January 2016
