The Sarasota Real Estate Market Sizzles at Year-End

The Moulton Sarasota Real Estate Report – November 2012

The Sarasota Market Sizzles at Year-End

The data and analysts reviews of the real estate market’s performance in November have been pouring in these last few days. It should come as no surprise to those who follow the news that our micro-market is continuing to set a recovery pace that few other regions can boast. The statistics provided by the Sarasota and Florida Associations of Realtors, the Census Bureau, other national industry organizations, and even the American Institute of Architects all report a robust, yet steady recovery. The momentum that we have been experiencing in the housing industry remains promising and has shown an ability to maintain positive momentum in all of the most important components that we follow. The information in this report should give you as much reason to believe, as I do, that the real estate market recovery is set to continue in the New Year.

Sales

The Sarasota Real Estate market’s sales figures were impressive yet again last month. Our area is said to be on pace to achieve the 4th highest volume of sales in the 90-year history of the Sarasota Association of Realtors. In addition, consistently rising prices seem to be bringing out more sellers, which should help our dearth of inventory in the coming months. With the traditional peak buying season still ahead of us here in Sarasota, I expect that when the tallies are in on the final month of 2012 and all experts offer their projections for 2013, we will hear confident expectations for an active season ahead.

• Closed transactions in Sarasota during November were a robust 38% higher than November 2011.
  • Florida sales in November were 24.4% better than last year.
  • On a National scale, sales have increased 14.5% from November 2011.
• According to data that I monitor, Sarasota’s closed transactions for 2012 year-to-date are 16% higher than last year at this same time; that is 1,200 more closed transactions compared to 2011.
• Single-family median sale price for all Sarasota transactions last month was $174,450 vs. $162,000 a year ago, an 8% increase over last year.
  • Florida State’s median price climbed more than 11% from last November.
  • Median sales price for existing homes in all of the U.S. in November increased more than 10%.
• Sarasota condo median sales price was $160,000 vs. $127,000 a year ago or 26% higher than last year.

Pending Sales

Pending home sales are a leading indicator of the activity expected to come in the next month or two. It also helps us to determine market stability and what coming trends may be. Again, properties under contract but not yet closed grew at a healthy pace, leading us to believe that the peak selling season ahead will prove to be impressive.

• Sarasota’s single-family properties under contract but not yet closed in November increased 12% over last November.
• For the same quarter year-over-year, pending sales in Sarasota have risen 16%.

Inventory

Little progress is being made in adding inventory of existing or new homes in the region. However, a recent Trulia survey found that 22% of current homeowners said that they would be likely or somewhat likely to sell in 2013. If this were true, it would increase national housing inventory by as much as five-times over our current listings. With our Sarasota area inventory at near decade lows, rising prices and a relatively slow addition of new homes should help to drive more sellers into the market. Homebuilder sentiment remains very positive, but they are now being faced with a shortage of skilled laborers, production of supplies not meeting demand and increasing costs of building materials.

A market is considered balanced between sellers and buyers when total inventory hovers around six months of supply, though in the higher priced categories, a stable inventory is considered 12-18 months. The following data shows that we are well below the targeted balanced market, but I remain confident that with the listing interest I have seen from sellers who have been sitting on the sideline and the large number of new building permits being issued, in the months ahead we will be seeing a more equalized inventory environment.

• Available listings in Sarasota have decreased 25% since the beginning of 2012.
• Based on sales in November, our region is sitting at approximately just four months of supply.
  • The present listed inventory in our area has not been this low since 1998.
  • There are now just 3 months of inventory for properties listed under $500,000.
  • In the segment between $500,000 and $1,000,000, there is a 10-month supply.
  • At the luxury level over $1,000,000, the available inventory is a 20-month supply.
• Four years ago the inventory was over 9,500 units, and properties for sale today sits at just 3,200.
• National inventory is sitting at 4.8 months of supply, compared to 7.1 months a year ago. It is reported to be the lowest level of inventory since December 2001.

What’s 2013 Look Like?

The favorable news throughout the Sarasota region and the nation relative to the healing housing market indicates that next year is going to be more steady sustainable revitalization, perhaps even to a greater degree than we experienced this year. The brightened outlook is based on solid data and, though the macro-economic conditions may cause some anxiety, the micro-economic climate in the Sarasota region appears to have gained enough momentum to be able to weather even some of the worst analyst fears. Why do I believe so decisively in a strong year ahead?

• Building permits in the Sarasota-Manatee area have increased 88% over last year setting a strong argument for:
  • Improvement in our inventory challenge.
  • A contribution to the recovering local jobs market.
  • Increase in demand for architects and designers who have spent the last six years struggling to find new projects.
  • More spending on supplies for home building and home improvements helping our regional vendors recover in their businesses.
• What are some other indicators that are at play in the recovery?
  • Home prices have definitely stabilized and should continue their gentle upward movement.
  • Our massive over-inventoried market has contracted to a manageable level.
  • Buyer demand is clearly up.
  • Mortgage rates remain low and are projected to move up slowly.
  • As mentioned above, builder confidence is strong and has risen every month of this year as is evidenced in the number of permits being pulled for new construction.
  • Fewer distressed homes are on or expected to enter the market.
  • The regional tourism market is showing considerable growth again, feeding a steady stream of new buyers to the area.

As we close out the year, I would like to take a moment to thank you for allowing me to share my Sarasota Real Estate market news with you. Your comments, and even debates with me over some of the projections I make, bring me pleasure knowing that my views provoke thought. I look forward to sharing more great Real Estate Market Recovery news with you in 2013!

May you and your families enjoy a beautiful holiday season and a bright and prosperous New Year!

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).

SARASOTA MARKET REVIEW NOVEMBER 2012