Real Estate Matters

Home sales in the Sarasota real estate market rose above the 600 level for only the second time in 26 months in June 2009, while the median sale price rose for both single family and condos, once again demonstrating a market in the initial stages of recovery.

Inventory levels once again dropped markedly, and the months of home supply on the market (a key indicator) – the number of months it would theoretically take to sell all the current properties for sale – now stands at 9.97 months for single family homes and 16.1 months for condos. The figures were 14.3 months for single family homes and 19.0 months for condominiums in May 2009, and 15.2 months and 22.9 months in April 2009. The clear trend is toward the figure o 6 months, which indicates a market in balance (anything below 6 months indicates a return to a seller’s market).

The overall sales level of 610 included 449 single family homes and 161 condos, which increased over last month’s total figure of 506 sales by 20.4 percent. June 2009 was also better than June 2008, which saw only 541 overall sales. The last time sales topped the 600 level was in May 2008, when sales hit 627. Prior to that, there were 653 sales in March 2007.

Pending sales also remained at very high levels, with 866 properties going under contract in June 2009. The figure was down slightly from 929 in May 2009 but near 981 pending sales reported in April 2009. The total of 866 is 50 percent higher than the 579 pending sales reported in June 2008. Pending sales have now exceeded the 500 level for the 18^th consecutive month and the 800 level for the fourth straight month.

The statistic is a strong indicator for the next two or three months of sales, when many of these pending sales will become closed sales. Pending sales reflect contracts executed by buyers and sellers during the month.

There has been very high interest in the federal $8,000 first-time home buyer credit, and this has helped spur the market. The credit expires on November 30, 2009, so local Realtors should strongly urge their clients to get started in the process in order to close the sales before that date.

In addition to the positive factor of the tax credit, the national recession and job market woes have held down what could have been a major surge in home sales. But despite the negatives in the national economy, the local real estate market continues to show signs of recovery.

Our market was one of the national hot spots for the real estate boom in 2008-2005, so naturally we experienced a rough couple of years as the market moved toward more normal, realistic pricing. But now, the community’s incredible amenities and attractive real estate prices are taking center stage, and we’re seeing the recovery taking root here.

The median sales price for single family homes stood at $190,000 in June 2009, up 22.6 percent from $155,000 in May 2009. The median sales price for condominiums stood at $250,000 in June 2009, a whopping 38 percent higher than $181,000 in May 2009. While prices have started to climb, they are still lower than June 2008, primarily due to the high number of short sales and foreclosures. Last June, the median sales prices were $250,000 for single family and $275,000 for condominiums.

The median price for all single family homes sold in the last 12 months was $180,000, compared to a median of $269,000 for the 12 months ending in July 2008. For condominiums sold in the last 12 months, the median sales price was $212,000, compared to last year’s figure of $340,000.

The inventory levels in the Sarasota real estate market in June 2009 continue to decline for both single family homes and condominiums. There were 4,477 single family homes and 2,587 condos on the market in June 2009, compared to 4,380 single family homes and 2,488 condos the previous month. The overall decline was from7, 868 to 7,064 properties, a 10 percent drop.

So there is good reason to suggest that we may be entering into the initial stages of recovery in our local real estate market.

Cheers, Bill Geller

A steady, unmistakable positive trend has emerged in the Sarasota real estate market over the past several months, proving true the old adage that “all real estate is local.”

The Sarasota Association of Realtors® has been releasing data and an analysis of the trends every month for the past several years, attempting to shed valuable light on the national downturn in the real estate market and its local impacts.

The media has contributed to the national real estate malaise by attempting to merge all statistics across the nation into an overview picture of the real estate market. But this methodology ignores the basic realities of real estate – local markets can and usually do move in opposite directions to the statewide and national statistics. Sarasota has been one example of a market that has made a turnaround in the past few months, and has seen sales in April and May 2009 top the 500 level for the first time in almost a year. In addition, pending sales have risen above the 900 level in both April and May – a statistic that indicates potentially stronger activity during the next 60 to 90 days, when many of these pendings will result in closed sales.

To the average newspaper reader, these local statistics might prove surprising, especially when considering the fact that most news agencies view Sarasota as part of a larger MSA

(Metropolitan Service Area), which includes Bradenton, Venice and the surrounding region. The MSA numbers are those released by the Florida Association of Realtors®, and are those most often cited in news articles. So, if Sarasota sales are up during a particular month in which Bradenton sales are down, or vice versa, the local trend for Sarasota is often skewed to the negative, or positive.

SAR always reports our member sales statistics for every month, and we pull these numbers from the Sarasota MLS. These numbers, good or bad, are released to our members and to the public prior to the date that Florida and National Association of Realtors® statistics are released.

We have been very encouraged by the recent strength of the local real estate market, and we are hopeful that this upward trend will continue as we enter the traditionally slower summer season, For example, for the April 2009 numbers, we saw higher sales along with a small rise in the median sale prices. This is an indicator of healthier market conditions returning. We’ve had many reports of high activity at open houses, and we’re starting to see more multiple offers on homes. Of course, until we get through this period of elevated foreclosures and short sales, the median sales price will remain artificially low. But we can expect those figures to return to a more historic average, with moderate property appreciation once this inventory of distressed properties clears.

This reduction in inventory has been created by a combination of fewer properties being listed, and increasing sales numbers. As the inventory continues to decline, the market will come back to more balance. And as we approach equilibrium, the buyers’ market we’ve been experiencing will be gone, and price appreciation will creep back into the market.

So, despite the continuing national recession, the Sarasota MLS statistics show a rebound throughout 2009. In the local Sarasota market, we have seen the trend already beginning toward lower inventories, higher sales, and a leveling of prices after several months of declines. The

May 2009 figures reflect this positive news, which bodes well for local real estate and the local economy in general.

Buyer opportunities abound in the current market and an example is an investor short sale offering for 15 new condominium units available at River Preserve in Bradenton. The 2 and 3 bedroom units, originally offered for prices above $240,000, have been approved by the lender for $60,000 per unit. If you or someone you know may be interested, please watch the video link below and attached bibliography link or call or email us for more information.

Cheers,

Bill Geller

Video:

Bibliography:

http://www.sarasotaandkeys.com/xSites/Agents/sarasotaandkeys/Content/UploadedFiles/Bibliography%20-%20River%20Preserve%20video.pdf