Real Estate Matters

The Sarasota Association of Realtors just released to the public December 2008 and year ending sales data. Pending sales rose to 571 in December as reported by members of the Sarasota Association of Realtors^®, topping the 500 level for the 12^th month in a row. Pending sales last month were much higher than the 374 reported in December 2007, which indicates that local real estate has not mirrored the national downward trend.

Pending sales reflect contracts executed by buyers and sellers. The recent numbers demonstrate a consistent, steady pattern, which means the national economic slowdown has not significantly deterred buyers in the Sarasota market.

“We are demonstrating strength in a difficult real estate environment, and that reflects on this area’s basic attractions,” said 2009 SAR President Bill Geller. “Sarasota still has the beaches, the cultural life, the great schools and wonderful climate and natural amenities. This is still paradise, and buyers have been able to take advantage of the lower home prices to make some amazing deals on quality properties.”

For the year 2008, the Sarasota market had 5,820 sales of homes and condos, just under the 6,176 reported in 2007. December 2008 saw 406 total sales, compared to 424 in December 2007. December’s total was higher than November 2008, when 311 sales were reported, a 30.5 percent increase from the late fall lull. The late summer and early fall months are traditionally the lowest period of home sales in the Sarasota market, and the recent upturn indicates the traditional season surge is beginning, even in the face of the recession and credit crisis.

One reason for this could be the historic interest rate plunge, which has seen the average 30-year fixed rates drop below 5 percent for the first time in decades.

“For customers who can take advantage of these rates, particularly first time home buyers with decent credit scores, this is an incredible time to purchase real estate,” said Geller. “With the low rates, in combination with the lower prices, buyers are able to get into their dream home with very affordable payments. We haven’t seen this convergence of attractive pricing and low interest rates for years.”

The median sale price for single family homes rose slightly in December, coming in at $175,000, compared to last month’s median price of $170,000 – a 3 percent increase from November 2008. Median condominium sales prices have been fluctuating widely throughout 2008, and settled at $255,000 for December 2008, a 30.8 percent rise over the $195,000 in November 2008. For the entire year of 2008, the single family home median sale price was $230,000, while condos were $320,000, both approximately 26 percent lower than the 2007 figures.

Another important market tracker – the absorption rate of properties on the market – continues to track lower than last year at this time for both single family homes and condominiums. Absorption rate is the number of months it would take to sell the entire remaining listed inventory in a particular category, based upon the sales for that particular month.

For December 2008, the absorption rate for single family homes stood at 19.1 months, compared to 35.1 months in December 2007. For condominiums, the absorption rate dropped to 31.8 months in December 2008, lower than the 37.2 months reported in December 2007, and much lower than last month’s rate of 41.7 months.