Real Estate Matters

Overall home sales in the Sarasota real estate market exceeded 500 for the second time since June 2008, inventory levels dropped, and the median sale price for both single family and condominiums stabilized in May 2009. These statistics all point toward a normalization and moderation of the market following a more volatile period during the past two years.

Pending sales also remained at highly elevated levels, with the overall total of 929 which was very near the 981 pending sales reported in April 2009. The trend for pending sales has been upward for several months. The total of 917 was 34 percent higher than the 692 pending sales reported in May 2008. Pending sales have now exceeded the 500 level for the 17th consecutive month.

Another positive influence in our local market is that foreign buyers have noticed the lower prices. The National Association of Realtors (NAR) recently released a survey of sales to foreign born buyers’ shows that Sarasota cornered 9 percent of all sales in Florida, coming in third behind only Miami and Orlando, and ahead of larger markets like Tampa, Naples and Ft. Myers. I recently attended a global real estate congress in Madrid, Spain, where the focus was directed to the global real estate crisis, with many international practitioners agreeing that the real estate market in the United States is leveling off and should see a much stronger market beginning later in 2009.

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

We are all 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. 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.

The continuation of historically low interest rates, the first-time homebuyers’ tax credit of $8,000, and the influence of government programs designed to ease the deep national recession have all been factors in the local real estate market recovery. Those who meet eligibility requirements and purchase a home this year prior to Dec. 1, 2009 are eligible for a tax credit of up to $8,000, and unlike the 2008 tax credit, this one does not have to be repaid. Across the nation, this has led to a surge in first-time buyers, and Sarasota has mirrored the national trend.

While prices have leveled off, they are still much lower than May 2008, primarily due to the higher number of short sales and foreclosures, which have pulled down the median prices from last year’s level of $274,500 for single family and $367,250 for condominiums.

The health of the Sarasota real estate market in May 2009 continues to improve for both single family homes and condominiums as inventories continue to decline. The months of home supply on the market – the number of months it would theoretically take to sell all the current properties for sale – now stands at 14.3 months for single family homes and 19.0 months for condominiums. This compares to 15.2 months for single family in April 2009 and 22.9 months in May 2008; and 19.2 months for condos in April 2009, and 24.3 months for condos in May 2008.

Any number above 6 months indicates a buyer’s market, while under 6 months is a seller’s market, and near or at 6 months would be a market in equilibrium, with an equal number of buyers and sellers.

So, real estate activity in the Sarasota Florida area continues to show signs of stabilizing and we all look forward to this trend continuing for the balance of 2009 and into 2010.

Cheers,

Bill Geller

Pending sales skyrocketed to 981 in April 2009 in the Sarasota real estate market, the highest since the boom years of local real estate in the 2003-2005 period and topping the previous month by 21 percent. Overall sales climbed over the 500 level – the first time since June 2008 – and the median sale price for both single family and condominiums rose above the March 2009 figure. This continued a recent upward trend for prices, which could mean the market doldrums have finally subsided.

The overall sales level of 505 was the highest since June 2008, and close to the 557 sales reported in April 2008. Of those sales, 367 were single family homes while 138 were condominiums – higher than the March figures of 353 and 128, respectively.

The good news also extended to pending sales, which once again rose in April 2009 to 981. In March 2009, pending sales topped 800 for the first time in three years. The total of 981 in April 2009 was 21 percent higher than the 817 reported in March 2009, and 31 percent higher than the 756 pending sales reported last year (in April 2008).

According to statistics from the Mid-Florida Regional MLS for members of the Sarasota Association of Realtors®, 778 single family homes and 203 condominiums went under contract in April 2009, compared to only 515 homes and 241 condos in April 2008.

Pending sales have now exceeded the 500 level for the 16th consecutive month, and have trended steadily upward all year. The statistic is a strong indicator for the next two or three months of sales activity, when many of these pendings will become closed sales. Pending sales reflect contracts executed by buyers and sellers during the month. The numbers indicate a continuing steady, strong pattern, and reflect clear buyer interest in the Sarasota market as the nation appears to be emerging from a lengthy recession.

Last month we saw a lot of major positive signs in our local real estate market. The fact that sales went up, while prices also rose, is an indicator that healthy conditions are returning. We also saw overall inventory drop to the lowest level of the year. Pending sales were almost at the 1,000 level –all very good news that shows we have buyers flooding the marketplace looking for good deals.

Also of particular importance is the recently enacted first-time homebuyers’ tax credit of $8,000, which has boosted sales this year. Those who meet eligibility requirements and purchase a home this year prior to Dec. 1, 2009 are eligible for a tax credit of up to $8,000, and unlike the 2008 tax credit, this one does not have to be repaid. Across the nation, this has led to a surge in first-time buyers, and Sarasota has mirrored the national trend.

The median sale price for single family homes rose to $160,000 in April 2009 from $152,125 in March 2009 – a 5.2 percent increase. The median sales price for condominiums rose to $182,750 in April 2009 from $166,750 in March 2009 – a 9.6 percent increase. While the figures have started to climb, they are still much lower than April 2008, primarily due to the higher number of short sales and foreclosures, which have pulled down the median prices from last year’s level of $285,000 for single family and $277,000 for condominiums.

The absorption rate of properties on the market continues to drop for both single family homes and condominiums, as inventories continue to decline. 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 April 2009, the absorption rate for single family homes stood at 15.2 months, compared to 17.1 months the previous month and 24.7 months in April 2008. For condominiums, the absorption rate was at 19.2 months in April, compared to 21.2 months in the previous month, and much lower than the 34.1 months reported in April 2008.

Is more good news on the way?

Cheers,

Bill

The Sarasota real estate market saw sales rise to the highest level of the year in March 2009 with a 33 percent increase over the previous month, according to figures released by the Sarasota Association of Realtors.  In addition, the median sales price for single family homes rose after steadily declining since late last year, indicating a potential sign of the bottoming of the local market.

The good news also extended to pending sales, which once again rose in March 2009 to 817.  The last time pending sales climbed over 800 was in March 2006.  Also, the total of 817 was 21 percent higher than pending sales reported in March 2008.  Pending sales have now exceeded the 500 level for the 15th consecutive month, and the statistic looks well for the next two or three months, when many of these pendings will become closed sales. 

We believe the current climate of historically low interest rates, major incentives for first-time homebuyers, and the many other government programs designed to stabilize the economy and housing industry are all having a very positive impact.  Every downturn is followed by an upturn, we know this to be true historically.  We've been through a difficult time in the real estate industry, and hopefully we are seeing the beginnings of a new, dynamic era. 

The recently enacted first-time homebuyers' tax credit of $8,000 will likely continue to boost sales this year.  Those who meet eligibility requirements and purchase a home this year prior to Dec. 1 are eligible for the tax credit of up to $8,000, and unlike the 2008 tax credit, this one does not have to be repaid. 

In addition, for March 2009, the absorption rate (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 single family homes stood at 17.1 months, compared to 24.1 months, lower than the 28.5 months in the previous month, and much lower than the 34.1 months reported in March 2008.

Cheers,

Bill Geller

Well, there are many indicators saying yes. Consider this. Pending sales for February 2009 in the Sarasota area are at the highest level since April 2006 and 100 more than 683 in January 09 and 19 percent higher than in February 2008. A recent article in the Sarasota Herald Tribune boasted that price drops and historic low interest rates are enticing buyers. Add to that, for the international buyer, the exchange rate for the euro is rising again, now at 1.34 from 1.24 at the first of March. Real estate in the United States is still a very safe bet attracting many Europeans and Canadians to our area.

This is not to diminish the fact that there are many difficulties and challenges facing Floridians and now that the Florida Legislature is in session, Florida Realtors will be meeting with state legislators this Tuesday and Wednesday in Tallahassee to insure that we work together to build a strong real estate market in Florida. As president of the Sarasota Association of Realtors I’ll be leading a delegation from Sarasota, in conjunction with the Florida Association of Realtors, to do just that. We want to ensure that legislative efforts concerning residential foreclosures, including rentals, are fair and equitable to all parties.

We want to encourage our legislators to allocate funds to prevent, combat and publicize the dangers of unlicensed real estate activity in Florida. Realizing that a strong housing market builds strong communities, we will be urging our legislators to lower taxes for non-homestead property owners and create more incentives for first-time home buyers. Also, there are several other key bills being considered that impact the Florida real estate market and we will be encouraging our representatives to vote appropriately.

Cheers,

Bill Geller

Pending sales in the Sarasota real estate market once again rose in February 2009, reaching 782 - the highest level since April 2006.  According to statistics from the Mid-Florida Regional MLS for members of the Sarasota Association of Realtors, 611 single family homes and 171 condominiums were reported as pending sales in February, almost 100 more than the 683 pending sales reported in January 2009 and 19 percent higher than the 654 pending sales reported in February 2008.

Another encouraging development is that pending sales have now exceeded the 500 level for the 14th consecutive month, and looks we for increased sales for the next two or three months, when many of these pendings will become closed sales.  Pending sales reflect contracts executed by buyers and sellers.  The report continues to reflect a steady, strong pattern, and indicates buyers are more active in the Sarasota market even in the face of difficult economic times. 

We are encouraged by this statistic, and the word of mouth reports indicating an uptick in showings and offers.  Buyers are becoming even more aware of the many opportunities in the Sarasota market and are making offers and executing contracts.  Also, local Realtors are continuing to educate the public on our market, and this is an excellent chance to purchase a great home at a very attractive price, with interest rates at historic lows.

Overall closed sales in February 2009 stood at 354, compared to 319 in January, for a 10 percent increase.  The figure was lower than February 2008, when 418 properties changed hands.  The breakdown was 260 single family homes sold and 94 condominiums sold.

Another encouraging development is the recently enacted first-time homebuyers' tax credit of $8,000, which should help spur sales to higher levels.  Those who meet eligibility requirements and purchase a home this year prior to December 1st are eligible for a tax credit of $8,000, and unlike the 2008 tax credit, does not have to be repaid.  This credit with historically low interest rates should help encourage more home sales.

Particularly for the first time homebuyer trying to purchase in the Sarasota market, this is a great time to buy.  Affordable prices, low interest rates, plus the tax credit, all make this the best time to buy in decades.

The median sale price for single family homes declined by a modest 5.3 percent in February 09 to $142,000, and condominiums declined by 10 percent to $198,000.  These statistics appear to indicate the growing number of short sales and foreclosure sales in the market, which has dramatically impacted the median sales price.

Another important market tracker, the absorption rate of properties on the market, continues to decrease for both single family homes and condominiums.   Absorption rate is the number of months is will take to sell the entire remaining listed inventory, based on the sales for that particular month. 

For February 2009, the absorption rate for single family homes stood at 24.1 months, compared to 25.3 months in January 2009, and compared to 29.6 months in February 2008.  For condominiums, the absorption rate was 28.5 months, compared to 38.4 months in January 2009, and much lower than the 44 months reported in February 2008.