Real Estate Matters

With all of the distressing news regarding our economy there was some encouraging news from the Sarasota Association of Realtors and Florida Association of Realtors. Pending sales in January 2009 rose by 18 percent to 683 and were over the 500 level for the 13 month in a row. Additionally, pending sales last month far exceeded January 2008 when only 516 pending sales were reported. That’s a 32 percent increase.

Pending sales reflect agreed to contracts by buyers and sellers. Theses numbers demonstrate a steady, strong pattern, indicating buyers are becoming more active in the Sarasota market as the traditional season gets into full swing.

These are certainly historic times for our nation’s economy, and we must be realistic and understand that higher unemployment and the recession impacts everyone. But we must also understand that even during downturns, opportunities exist for savvy buyers. The Sarasota market offers a remarkable number of high quality properties, and the lower prices have made this area a goldmine of opportunity.

Overall closed sales in the Sarasota-Bradenton market experienced only a modest 4% increase in January 2009 over January 2008, according to FAR, but that was expected, especially during a four-year election cycle, when real estate activity often sees a lull prior to a new administration taking office.

The recent signing of the $787 billion American Recovery and Reinvestment Act, plus the Obama administration’s enactment of the $75 billion Housing Support and Foreclosure Prevention program should help improve the real estate markets even more in the months ahead. We are clearly seeing a focus by this administration on the root of the economic problems – the real estate downturn. There have been several initiatives adopted which include suggestions by the National Association of Realtors, and we are hopeful these programs will help us back on the road to recovery.

Another encouraging market tracker is the absorption rate of properties on the market, which 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 January 2009, the absorption rate for single family homes stood at 25.3 months, compared to 39.0 months in January 2008. For condominiums, the absorption rate was at 38.4 months in January 2009, substantially lower than the 52.0 months reported in January 2008.