Sarasota Association of Realtors® Market Update

Sarasota Association of Realtors® September Market Update: Sarasota real estate market trending toward normalcy

A steady drop in property inventory for sale, combined with a stable sales demand in the Sarasota real estate market, is pointing toward normal, healthy property appreciation in the coming months.

An analysis of sales, prices and inventory figures reflects a market in recovery, led by a declining pool of available properties on the market. The inventory of available properties for sale has been dropping for the past nine months, and hit another decade-low figure of 4,408 in August 2011. Sales during the past 10 months have exceeded 500 every month, and exceeded 700 four times. As a likely result of consumer demand and dropping inventory, the median sale price for single family homes and condos has recovered from the lows reached in February 2011, when both categories showed a median price of $137,500. The latest monthly figures in August showed a median price of $165,000 for both single family homes and condos - a 23 percent improvement from the lows of only seven months ago.

"We're starting to see a definite trend line developing, and it's very positive," said SAR President Michael Bruno. "No one has a crystal ball, and it wouldn't be wise for anyone to make a solid prediction on the future of our market. But we can clearly see the normal market forces of supply and demand as Sarasota is becoming a seller's market, in which price appreciation would be expected."

The local market is mirroring the national picture to some extent. NAR Chief Economist Lawrence Yun recently noted, "The (national) housing market is still not yet back to normal, but the inventory component is moving in the right direction. There were 3.6 million existing homes on the market for sale, down measurably from the peak inventory of 4.6 million in the summer months of 2008."

Members of the Sarasota Association of Realtors® reported 601 property sales in August 2011, which was almost 6 percent higher than the August 2010 total of 567 sales. The breakdown was 445 single family home closings (the same as in July 2011) and 156 condo closings (two more than in July). The median sales prices (noted above) were about 6.5 percent higher than last year at this time.

In August, the total inventory of available properties dropped again to the lowest level in more than a decade. There were 2,817 single family homes and 1,591 condos on the market. The current figure represents an astonishing drop from the high of 17,102 properties on the market in March 2007. With only a quarter of the properties on the market compared to four years ago, competition for properties has been dramatically increased, and agents are now fielding multiple bids on many properties.

The months of inventory dropped slightly to 6.3 months for single family homes, from last month's figure of 6.4 months. For condos, the months of inventory also dropped to 10.2 months from July's figure of 10.7 months. In August 2010, the figures were 9.3 months and 13.5 months, respectively. Both figures again remained far below the highs of 25.3 months for single family (in early 2009) and 41.7 months for condos (in late 2008). This statistic represents the time it would take to sell the existing inventory at the current month's rate of sales. The 6 month level is traditionally a point which represents equilibrium in the market between buyers and sellers. 

In some price ranges, the available inventory is even tighter. For example, combining single family homes and condos priced under $200,000, there were 350 sales last month, and there are 1,653 properties available under that price, or 4.7 months of inventory. This number represents a clear seller's market, in which bidding competition and price appreciation would be expected.

For properties priced under $350,000, most price ranges are indicating a seller's market has returned. This is in marked contrast to three years ago, when a buyer's market was in full force.

In August 2011, pending sales were roughly the same as in July 2011 - 618 for single family homes, and 195 for condos, for a total of 813. This was also almost identical to last August when 816 pending sales were reported.

"We are coming out of the usually slower summer sales months with a much improved, healthier real estate market," said Bruno. "The fall should prove to be steady and strong. The only thing continuing to hold back our market from even bigger numbers is the percentage of distressed sales, which is still higher than we'd like to see."

The overall percentage of distressed sales (foreclosures and short sales) rose slightly in August 2011 to 41.2 percent from the 38 percent figure in July 2011. That compares to 47 percent as recently as February 2011 and a high of 51 percent in November 2010.

"The non-distressed properties are still selling for two or three times more than the short sales and foreclosures," explained Bruno. "This is a huge difference, and naturally pulls down the overall median sale price. But everyone remains hopeful that the distressed inventory, which now represents less than 20 percent of the total available properties, will start to drop rapidly in the coming months." 

Click HERE for the complete press release in PDF format, plus three pages of statistical charts.

Sarasota Association of Realtors® Market Update

Sarasota Association of Realtors^® July Membership Update: Sales moderate in July 2011; inventory continues to drop

Members of the Sarasota Association of Realtors® reported 599 property sales in July, which was 14.3 percent higher than the July 2010 total of 525 sales.

There were 445 single family home closings and 154 condo closings in July. In 2011, four months have topped 700 in sales, with June reaching 728. In May, sales peaked at 796 sales during the height of the spring buying season, a pattern that has been evident for the past few years. Last July, sales also moderated as the slower summer season kicked in and the Federal homebuyer tax credit expired.

In July 2011, the total inventory of available properties dropped again to the lowest level in more than a decade. There were 2,829 single family homes and 1,656 condos on the market, for a total of 4,485 available properties. This is more than a 7 percent drop from the June 2011 total of 4,830, and a 25 percent drop from the July 2010 figure of 6,054. The decreased inventory could spur stronger competition for homes and condos, and subsequent price appreciation.

The median price of a single family home in July was $169,900, just slightly lower than the June figure of $175,000. The July 2010 figure stood at $155,000, so the median price was up almost 10 percent from last year at this time. The condo median price slipped to $145,000 from $185,00 in June, but was 14 percent higher than last July's median of $127,000. 

The months of inventory rose to 6.4 months for single family homes, from last month's figure of 5.9 months. For condos, the months of inventory also rose to 10.7 months from June's figure of 8.2 months. Both figures remain far below the highs of 25.3 months for single family (in early 2009) and 41.7 months for condos (in late 2008). This statistic represents the time it would take to sell the existing inventory at the current month's rate of sales. The 6 month level is traditionally a point which represents equilibrium in the market between buyers and sellers.

Aside from the lower inventory, another bright sign in July 2011 was the increase in pending sales from 754 in June to 799 last month. Last year, pendings were trending downward in late summer which brought a decrease in total sales in the fall.

"While we did see the market seasonally moderate in July from the hot selling pace we've experienced in the first half of 2011, these numbers still reflect strength in the market," said SAR President Michael Bruno. "There hasn't been an alarming drop in sales, and the higher number of pending sales signals a healthy fall market. The inventory of available properties remains at a low for the past decade, and this historically means we should experience upward pressure on prices. The percentage of distressed property sales has remained stable, which is another positive factor."

The overall percentage of distressed sales (short sales and foreclosure sales) remained at 38 percent of the July 2011 sales. That compares to 47 percent as recently as February 2011 and a high of 51 percent in November 2010.

"The impact of recent events in the financial markets may cause some uncertainty in terms of national home sales," explained Bruno. "But we all know that real estate is local, and Sarasota is traditionally a market that emerges from tough times with strength and leads the new wave of prosperity." 

Click HERE for the complete press release in PDF format, plus six pages of statistical charts.

Sarasota Association of Realtors® Market Update

Sarasota Association of Realtors^® June Membership Update: Sarasota real estate market remains strong in June 2011

Members of the Sarasota Association of Realtors^® continued to sell properties at a brisk pace in June 2011 with 728 total transactions recorded last month. This marks the fourth month in the last 12 with sales exceeding the 700 level - all occurring in 2011. In addition, the median sales price for single family homes hit the highest level since last June, and the total inventory of available properties dropped to the lowest level in more than a decade, which could spur stronger competition for homes and condos.

There were 510 single family home closings and 218 condo closings in June, which continues the strong sales surge in 2011. While the total was somewhat lower than May's 796 sales, and June 2010's total of 776 sales, the current trend has been the strongest since the real estate boom of 2003-2005. The sales even rival the mini-boom from last year's federal homebuyer tax credit incentive. This year, there is no government program propping up the market, so the sales simply reflect a high level of buyer interest. Prices for both single family homes and condos were also above the annual median prices for the past two years, with the single family median sales rising to $175,000, the highest since June 2010 (also at $175,000). The figure was a 10 percent jump from May, when the median price was $159,000. The condo median price slipped to $185,000 from last month's surge to $218,750. But the figure was still much higher than the median for the last 12 month period ($162,000).

The total available property inventory dropped to 4,830, another big decrease from the May figure of 5,010, and now the lowest level in the past 10 years. The inventory reached its apex in April 2007, when 17,089 properties were on the market. 

The lower inventory, combined with the higher sales rate, has now dropped the months of inventory to 5.9 months for single family homes and 8.2 months for condos, both figures far below the highs of 25.3 months for single family (in early 2009) and 41.7 months for condos (in late 2008). The 6 month level is traditionally a point which represents equilibrium in the market between buyers and sellers. Once the figure trends downward below 6 months, buyers are often forced to compete for properties, which generally drives prices higher.

In fact, at the lower price ranges below $120,000, where about 40 percent of sales are occurring, the months of inventory has dipped to below 4 months. That means competition is very high for these properties, with multiple offers often reported by agents. The overall market (combined single family and condo) stands at 6.9 months of inventory.

"It is encouraging to see how the Sarasota market has continued this strong momentum in the face of continuing weakness in the national and state economies," said SAR President Michael Bruno. "The inventory of available properties, which is lower than it has been since the 1990s, is a very important statistic. Historically, prices rise as competition for homes increases, and we're seeing that occurring in our market. The percentage of distressed property sales is stabilizing, so prices should naturally continue to rise."

The overall percentage of distressed sales (short sales and foreclosure sales) remained at 38 percent of the June 2011 sales. That compares to 47 percent as recently as February 2011 and a high of 51 percent in November 2010.

 "As an association, we have kept our members educated and informed about the ongoing distressed property situation, and they have benefited greatly from this valuable resource," explained Bruno. "Realtors who have kept current on the latest trends and changes within the market have been able to make the best of a tough situation, and the numbers reflect that. We all hope to see a significant drop in foreclosures and short sales in the coming years, and when that happens, Sarasota agents will be ready to handle the new market realities."

Pending sales dropped to 754 from last month's level of 841. They reached a recent peak of 1,208 in March 2011, continuing to reflect our area's typical seasonal slowdown. Pending sales are properties going under contract during the month, and the statistic is a strong indicator for the next two or three months of sales, as pending sales reflect current buyer activity. Last June, pending sales were at 767, so the seasonal trend appears to be holding true.

Click HERE for the complete press release in PDF format, plus six pages of statistical charts.