March 24, 2008
*The following press release was sent to local media on March 24 at Noon.
February property sales rebound by 28 percent in Sarasota
Pending sales also very high, a good indicator for stronger market ahead
The month of February 2008 saw a big jump in overall property sales in the local market, according to statistics pulled from the Sarasota MLS system. There were 423 property sales reported in the Sarasota MLS, compared to only 329 sales in January 2008. In addition, pending sales climbed to 654 in February, the highest level in nearly a year (March 2007 was the last month with higher pending sales at 706).
There were 294 single family homes sold by SAR members, along with 129 condominium units. While sales numbers were strong, the median sale price for homes and condos continued to fluctuate. Single family homes saw a small rise in the median sale price, from $265,000 in January 2008 up to $285,000 in February 2008 - a 7 percent increase. But condominiums saw a drop in the median sale price from $303,500 in January 2008 to only $230,500 in February 2008 - a 24 percent decline.
"We've been receiving strong anecdotal evidence from brokers that traffic has picked up significantly," said Helen Sosso, 2008 SAR President. "The number of people attending open houses is growing week by week, and the number of sales contracts has obviously grown substantially. We hope what we're seeing is the start of a strong growth cycle in the local market."
One of the continuing bright spots in the February 2008 report was the strength in pending sales, which stood at 654 - the highest level in the past 11 months. In March 2007 pending sales were at 706. Pending sales have been edging upward since December 2007, when there were 374 pending sales.
Pending sales counts the number of signed contracts in a month, and is a leading indicator of sales activity. There is a direct correlation between pending sales and closed sales that are reported in the following month or two.
Inventory levels were also lower in February 2008, compared to February 2007. This year's February numbers stood at 10,035 single family homes (compared to 10,391 in February 2007), and 5,588 condominiums (compared to 5,960 in February 2007). In January 2008, there were 9,976 single family homes and 5,610 condominiums on the market. In December 2007 the figures were 9,688 and 5,502, respectively.
The days on market, which translates to the average time it took to sell a property, was at 160 days for single family homes, slightly lower than the 162 days in February 2007, but higher than the 158 days in January 2008. Average days for condos was 219, a slight drop from the 223 days reported in February 2007, but higher than the 182 in January 2008.
An analysis of the days on market numbers appears to indicate that a higher number of properties that were on the market longer than 400 days actually sold in February. This tended to inflate the February statistic, but also seems to indicate buyers are beginning to chip away at even the "harder to sell" inventory.
Dr. Lawrence Yun, NAR's chief economist, recently noted that several factors will continue to drive the local real estate market:
· U.S. and Foreign Baby Boomers: This massive group of people is just turning 60 and the more financially successful ones are on the verge of retirement. Over the next 20 years, a steady flow of wealthy retirees will be flowing into sunny warm weather destinations. Waterfront views will be particularly sought after and people will be willing to pay high premiums.
· Nouveau Rich: There is no one who likes to show off more than the people who lived through equality in income and consumption. Former communist countries like Russia and Kazakhstan are creating newly minted oil barons. Entrepreneurs are springing up en masse in Eastern European countries. A luxury Florida property is the ultimate conspicuous consumption.
· Improving Insurance: Sarasota is artificially being harmed because of high property insurance rates. After the unprecedented number of destructive hurricanes (those with category 3 and higher wind speeds) in 2004 and 2005, the insurers jacked up insurance rates. Yun foresees some retreat in regards to insurance rates in upcoming years because of windfall insurance company profits.
· Improvement in Property Tax: The very high property tax on second homes that is placed on non-residents of Florida has hurt this important housing segment. A good bet is that the populace will demand of legislators some measure to alleviate this tax, which appears to hurt non-residents, and has also harmed home values of primary homeowners in the state.
The current high inventory conditions may be that perfect window of opportunity for some astute homebuyers to take advantage, said Yun.
Sarasota Association of REALTORS®
