The Moulton Sarasota Real Estate Report
Year-End 2013 Real Estate Data Reveals Resilience and Records
Most of the reports, data and expert opinions that I look to when researching my monthly Sarasota Real Estate reports have been issued. As I have reported throughout the year, the Sarasota region has had an extraordinary year, and with the market improvement at a reasonable and sustainable tempo we are poised for a healthy and prosperous 2014! Some of the more remarkable changes can be seen in the progress over the last three years. Just a few of the indicators that impressed me are:
- At the end of 2010 total inventory for sale in our market was 6923 units – 47% higher than at the end of 2013. Current inventory has not been this low since 1998.
- Months of inventory at that same time was reported to be 8.6 months. On December 31, 2013 months of inventory based on closed sales was at just over four months.
- Median prices in our region in December 2010 were 25% less than those measured at the end of 2013.
- The average number of days from listing to contract has fallen 35% since the end of 2010.
Though considerable progress in the recovery of our precious Sarasota economic driver, the housing industry, has taken place, the pace that the region saw was swift yet comparatively moderate leaving us plenty of room to continue to grow at a sustainable rate through the coming year. According to recent statistics reported in TrendGraphix, our Sarasota inventory of single-family homes has increased almost 17% over last year, and pending sales were up almost 11% in December compared to previous year. After pending sales are closed, it is estimated that we will be left with approximately 5.2 months of inventory, nearing the 6-month inventory point thought to indicate a balanced market. The condominium market continues to be pressured. Though several impressive projects have been revealed and are in various stages of permitting, nothing has been released for occupancy in several years causing condo inventory to have fallen 10.5% to last year and likely compressing further over the coming year and causing upward pressure on prices.
The 2013 year-end results in the local, regional, state and national real estate marketplace have been well reported over the last few weeks. Some of the more important industry improvements that I have seen and not reported previously are:
- The Florida housing industry has now experienced 25 consecutive months of home price increases.
- The statewide median price rose 11.4% in the last year, national increase was 9.9%, and our local Sarasota median price trumped both with the rolling 12-month average recording a 20% surge.
- Nationally the number of homes under construction showed the 28th straight month of increased units with housing starts jumping 18% over prior year.
- In the Sarasota area, single family home inventory has risen over prior year bringing inventory to a more manageable level, but with limited new condos completed, we are still facing a declining condo inventory causing expectations of a steeper climb in prices compared to single family homes.
- Inventory in the under $500,000 segment of the market is currently just 3.6 months, in the $500,000 – $1 Million group inventory was 7.8 months at year-end, and in the luxury classification of over $1 Million the inventory is now showing 13.5 months of supply, the lowest measured since 2002 and 65% lower than 2007, the local area peak.
- In the luxury market, which is a large percentage of the business that I transact for my clients, inventory has compacted substantially and is now at what market analysts consider a balanced level for this price segment.
- In the month of November, new permits issued for construction of single family homes in Sarasota increased a little over 29% (December permit data is not yet available.) Virtually every month of the past year has shown considerable permit activity in the region.
- The national home sales volume in 2013 was reported to be the highest since 2006 – an increase of 9.1 % over 2012, according to the National Association of Realtors. Locally, our total sales for the year rose just under 9%.
And because the distressed inventory discussion in our region is still an extremely relevant one, I think it is important to update my readers on the state of this class of properties. It is of no surprise to those of us here that Sarasota has been cited as the epicenter of bank-owned homes, foreclosures and short sales over the last few years. However, despite Florida still being called the top market for distressed homes, Sarasota has successfully moved ahead as other parts of the state continue to struggle. Before the market collapse, fewer than 1% of the homes in our market were considered distressed. At the height that number skyrocketed to more than 50% of our available inventory in late 2010. As this trend continues, there will be less impact from the REO’s on pricing allowing the increases we have been seeing in median sale prices to maintain their upward climb.
- Currently only 377 properties for sale in the MLS are listed as short sales or bank owned (REO’s), equal to about 9% of available properties.
- Of the distressed sales listings 81% are under $250,000, 13% are listed between $250,000 and $500,000 and only 4 or 1% are over $1,000,000 signaling to luxury buyers not to waste your time only looking for a distressed sale listing.
- During 2013 sold distressed properties were 2,613 equaling 23% of all sales.
- Of the sold distressed properties, 87% of them were under $250,000, 9% were between $250,000 and $500,000 and only 75 sales were between $500,000 and $1,000,000.
- Just less than ½% or only 18 properties of the sold distressed properties were over $1,000,000.
As we enter our peak selling season here in the Sarasota real estate market, along with other industry experts and analysts, I am convinced that we will experience moderating price increases due to the narrowing gap between inventory and buyers as more units are entering the market. I also believe that, though my listing clients would love to see a spike in selling prices, moderation is a healthy market trend to prevent the possible overheating that we experienced in years past. The challenge of limited condominium inventory may cause a higher growth in prices in that segment, but my research indicates that even there we will see sensible increases rather than extreme changes. Based on the pace of reservations made at the new condo projects announced in our region, there is a healthy appetite for new construction and I am eager to see these new developments come to fruition.
With the expectation that prices will increase, the pace of new product entering the market is not anticipated meet demand, especially at the luxury level, and as we hit the months when we see the most sales activity, it is my hope that those potential sellers that are still sitting on the sidelines will finally take the plunge and list their properties. This is an ideal time for sellers looking to move up, try a new neighborhood they’ve been considering, or change housing from single-family to condo or vice versa. As always, I would be delighted to assist anyone wanting to test the market by offering my Comparative Market Analysis (CMA). This proprietary program allows me to analyze your home or property along with recent area sales, other homes on the market, and current overall market performance, and guide you through the step-by-step process of how to use your personalized CMA report to maximize your asset’s market value.
And, finally, many thanks to my valued clients and referring friends who through listings and sales volume allowed me to reach a position in the top-20 producers of the more than 5,000 Sarasota and Manatee realtors. I am also grateful to have the power of the region’s most successful brokerages, Michael Saunders & Company, which as a company achieved more than $2.2 Billion in 2013 sales volume.
The following statistical data is provided through the Sarasota Association of Realtors for properties throughout Sarasota County. The table summarizes what happened in each price segment. The Sold, 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).