August 2015 Inventory Drops; Prices Climb
The median sale prices of properties in Sarasota and Manatee skyrocketed this time last year, and the current active inventory of properties on the market continues to decline, making it a strong seller’s market throughout the entire region.
According to the Realtor® Association of Sarasota and Manatee, the total inventory of single-family homes and condos has dropped to 2,534 in Manatee County and 3,303 in Sarasota County. Compared to 2,724 in Manatee County last August and 3,745 in Sarasota County, that represents declines of 7 percent and 11.8 percent, respectively. When the housing market reached an equilibrium between sellers and buyers in 2013, there were approximately 5,000 properties listed in Manatee County and 5,500 in Sarasota. Those figures have steadily declined for more than 30 months, and the current inventory level represents a 40 percent drop from the norm.
Because of the decline in inventory, median sale prices continue to rise in both counties. In Manatee County, sellers saw an increase of 18.8 percent, from $223,000 last year to $265,000 presently. In Sarasota County, the median sale price of single-family homes increased by 21.1 percent over the span of 12 months, from $195,750 to $237,000.
Condo prices have also increased substantially in both counties. In Sarasota County, the median sale price went from $177,000 to $220,000, an increase of 24.3 percent. In Manatee County, the median condo sale price went from $122,000 to $155,000, an increase of 27 percent. A combined 50 sales that topped $1 million propelled the median sale prices; however, there were 647 sales below $200,000 across the counties to balance them out, making up 36 percent of the entire market.
What does this mean?
The economic laws of supply and demand have certainly influenced the housing market in recent months. As the supply dwindles, the median price rises more with every passing day. The lack of current available inventory, especially compared to the equilibrium levels and prior peaks, is remarkable. In 2006, for example, there were more than 15,000 properties on the market across both counties. Despite the low inventories now, there are historically high sales numbers, and fewer properties are staying in the market for very long because the demand is so high. A property in good condition at the right price will typically sell incredibly fast.
During this past August, houses spent a median of between 39 and 57 days on the market. That represents a major drop from last August, when houses were typically on the market for between 55 and 70 days. Homes are moving much faster now that the supply is so low. Both counties also saw August’s supply of inventory stay well below the six-month level that defines a market with equilibrium between sellers and buyers. As of late, the figure stands at between 3.2 and 3.6 months on the market in both counties for condos and single-family homes.
In August of this year, there were 1,709 combined sales in both counties. That represents a decrease from July’s figure of 1,974 but an increase from closings in August of 2014, which was 975. Sales topped the thousand mark for the sixth month in a row, which is something that has never happened before in Sarasota County. Manatee County had 661 total sales in August, down from July’s 768 and nearly the same as last August’s total of 674.
Experts Expect Prices To Continue Upwards
Sales have been up and down, and the last quarter experienced a slight dip, but experts are still optimistic about the market. The Federal Reserve has declined to raise interested raise thus far, and the steady decline in unemployment rates indicates a positive future for the market. Some of the late fall and winter visitors may boost sales, as well, because they may be in the market to eventually relocate.
New pending sales, which indicate new contracts written in the area, decreased by approximately 5 percent from August of 2014, and all categories had slight slumps. Pending sales typically reflect the future direction of the housing market, and the numbers tend to drop in August after the spring and summer sales surge has died down a little.
The market in both counties is strong, and there’s plenty of room for potential growth. Real estate agents hope to see an increase in the available inventory as prospective sellers realize just how lucrative the market currently is. If there is an increase in the number of properties for sale and it coincides with the winter visitors who decide on moving to either county permanently, the market will thrive in the foreseeable future.
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