Sarasota Real Estate Market - August 2012
Market Bias Shifts to a Seller's Market
Sarasota real estate sales continue to demonstrate a somewhat predictable pattern as in past years. We continue to notice each monthly low during the summer to be higher than the previous year's low. Contracts being written today will close in the next 60 days which should be the beginning of the seasonal uptrend expected in November. Even with the modest cooling of the summer market, the expected retreat is ahead of the lows from prior years. If you are looking for a deal to be proud of in the years to come, you should be looking for a Florida home now.
We are in a Buyer's Market, right?
It is generally accepted that a “balanced” market is a market with a six month supply of inventory. Right now, 872 sales in August with an inventory of 3,985 represents a 4.6 month supply of homes. We predicted in April that this market had already hit a bottom and today's numbers are starting to back up our prediction. It is becoming more of a seller’s market. The lack of active properties on the market should be of great concern to those buyers hoping to "steal a deal." We are at the end of the summer market and expectations are that the winter buying pressure will push prices higher.
One difference this year over past years is the inventory levels are down by approximately one-third. Over the past several years, inventory was generally in the 6,000 range. Inventory today is at 3,985 homes and condos for Sarasota County and you can get the up to date inventory count here.
Sarasota Sales are Up for August
Sales by unit showed an uptick this month due to an increase in foreclosure and short sale closings. “Normal” sales were largely unchanged month over month at about 562. These are positive signals for the market and are consistent with an obvious improvement in market conditions over the past several years. We are seeing higher lows and higher highs with respect to units sold, average and per sqaure foot price. Since inventory is limited by sellers and banks deciding to market their properties, a possibility of sales hitting a barrier not due to lack of demand but a lack of supply is real.
Sarasota Average Home Prices follow Prior Year Trends at Higher Levels
Average cost per square foot continued to retreat after the significant uptick this spring. Even though the number is down, there was only one month with a higher number since 2010. Only 65% of this month’s sales were normal in that no bank approval was needed on behalf of the seller. September sales have historically been the low month for this metric. Unless there is a surge in new listings, expect demand from snowbirds and others to prevent any further erosion.
Average Sale Price Down Seasonally but at Higer Levels
The average sales price dropped to $243,000 from last month. Even so, this number is close to the highs of last year. Much of the downward turn can be attributed to the uptick in foreclosure sales that are generally in the lower price ranges. Sales where no bank is involved on the seller’s side were flat month over month which would be positive given the time of year. If this pattern holds, the closings in November through January 2013 should show an upward turn. This means the contracts that are are written between now and October will be the contracts written at a seasonal bottom. The chart is showing higher lows for each of the past two years. The presidential election will be behind us in November which will eliminate any distractions about the future.
The Market is Showing a Bottom
We see current market conditions as a possible final opportunity to buy low. Even with month over month numbers being down in the summer (as expected), inventory is tightening and demand remains relatively strong. The anticipated seasonal levels are down but at higher levels than the past three years. Annualizing this year’s numbers also show this market is headed up from here. We expect the total units sold to be the third best year since 2004. Three consecutive upticks in average sale price would also indicate the beginning of a trend.
A Broad View of the Market
It helpful to judge market performance with monthly figures, confirmation of where the market is year over year helps to get a longer view of the market. This longer view takes the bumps out that can be seen frequently in shorter timeframes. What we see is the annual sales projections for 2012 as compared annually from 2004 show two things. The number of homes being sold is the third best over the past 10 years and three consecutive years of modest up ticks in average sale and square foot prices.
We never get too excited about a one month (or year) bump but three consecutive moves in the same direction are the beginning of a trend. The annual figures are showing we are at the begining in a broad trend up.
We Can Help You Find Your Next Home
Our specialty is helping you find and negotiate the best deal possible for you. It is our job to understand the market and provide you the best insites to help you make the best decisions possible in today's market. Every home is different and every situation has their own unique opportunities. We help deliver the best service possible and look forward to helping you find your next home.
John Woodward
SarasotaOne Partner
Broker/Owner
Sarasota Real Estate Group
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