Real Estate Matters

Pending single family home sales in October were 549 compared to 446 for the same month last year according the Sarasota Association of Realtors. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

Nationally, pending home sales remained in a stable range against a deteriorating economic backdrop according to the National Association of Realtors. Lawrence Yun, NAR chief economist, said a review of the past year is instructive. “Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding a generally narrow range,” he said. NAR went on to say that, although conditions remain uneven around the country, some areas including Florida and California are showing healthy gains in pending home sales from a year ago.

More sales will stabilize home prices by bringing down inventory and will also lessen foreclosure pressure. In Sarasota the absorption rate of properties on the market is lower than last year at this time and has been steadily declining with decreasing inventories since May. Absorption rate is the number of months it takes to sell the entire remaining listed inventory in a particular category, based upon the sales for that particular month. In Sarasota, the absorption rate for single family homes stood at 18.2 months in October, compared to 31.7 months in October 2007.

The current local market continues to demonstrate statistically that we have a great selection of affordably priced housing for buyers to purchase. And in addition, declining inventory levels normally indicate the market is returning to a more historical balance, which will eventually lead to normal, long term price appreciation.

Cheers,

Bill