July sales data has just been released and all evidence points to a consistently improving Sarasota real estate market with sales levels not seen since the 2003-2005 boom.  Our traditionally slower selling season is surprisingly active and a significant number of the vacant housing supply has been absorbed.  Market expert’s predictions for sales, pricing and inventory are being proven to have been mostly too conservative.

One of the most remarkable areas to note is that transactions in July were significantly higher than July 2011. Another is the steady increase being seen in pricing with the median sales price for single family homes reported to be $178,000 in July, which is higher than the 12 month running average of $167,000. For condos the median sales price remained solid at $176,000. The 12 month running median average continues to be much stronger than last year, which is attributable to the especially low inventory in the lower price categories and the diminishing inventory at the higher end of the market. The median price of single family homes has risen more than 30% from the low reached 16 months ago and the condo price has risen 40% from the low point.  One of the main reasons for this is the depletion being seen in distressed property listings, which is discussed later in this report.

Another important statistic to take note of is the number of pending contracts currently in the system, a full 20% greater than last year at this same time.  Monitoring sales in process is important as it gives us a glimpse of sales volume for the coming month and its probable effect on inventory within the marketplace.  New housing starts become important when looking forward and determining how pricing may be affected by the number of units available to interested buyers.  National experts are reporting that July was the 4th straight month of gains in builder confidence and based on new permits and projects already underway, they also predict that through the end of the year we are likely to see at least a 20% increase in new home starts.  In July national gains in new construction were 21.5% ahead of last year and permits increased almost 30% year-over-year.

The news of impressive sales, pricing gains, builder confidence and other measures of our improving market is important, but the key topic amongst brokers and agents that is affecting Sarasota real estate remains the issue of inventory.  The available listings continue to decrease slightly on a monthly basis, with this year already experiencing an 18% decrease since the beginning of 2012, currently a decade low.  A real estate market is considered balanced and neither an advantage to sellers or buyers when supplies are at 6 months.  With our area sitting at 4 ½ months of inventory, this will lead to pressure being placed on prices, which has already been seen especially in lower price points and specific most desirable neighborhoods.  It was reported that the last time inventory was this low was in 2004.

Based on the 2012 average of closed sales of 785 per month, 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 9 month inventory and over $1,000,000 the available inventory is an 18 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.

Of the current listings 13% 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 listed as 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.

The inventory across most of our key feeder markets is also falling and prices inching up, which is an excellent sign of opportunity for relocating new home buyers to generate a steady flow of prospects to the Sarasota area. The statistical reports, expert outlooks, and other signals are encouraging and, though we still have a long way to go before the market is fully recovered, there is no question in my mind that our outlook is bright.

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).


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