July 6th Sarasota MLS stats
Here is my ongoing look at inventory levels in the Sarasota real estate market. Go to June 25th MLS stats to see changes in inventory.
July 6th
4,332 single family homes for sale
105 fewer homes for sale since June 25th
3,042 condominiums for sale
69 fewer condominiums for sale since June 25th
I searched Sarasota, Lakewood Ranch, Lido Key, Longboat Key, Siesta Key, Bird Key, Casey Key, Nokomis and Osprey for these numbers. MLS data is believed to be accurate but not guaranteed.
July 6th
4,332 single family homes for sale
105 fewer homes for sale since June 25th
3,042 condominiums for sale
69 fewer condominiums for sale since June 25th
I searched Sarasota, Lakewood Ranch, Lido Key, Longboat Key, Siesta Key, Bird Key, Casey Key, Nokomis and Osprey for these numbers. MLS data is believed to be accurate but not guaranteed.
posted by Marc Rasmussen at
7:51 AM
6 Comments:
Maybe some of the fence-sitters decided to buy before rates go higher in the last month or so. IMO, that premise is not enough incentive to propel the sales volume in the local market going forward.
In my estimation, every quarter point rise in interest rates takes another 2-5% off the sales price of homes currently on the market.
The Fed doesn't meet until late August to decide on their next interest rate decision. For those trying to sell their homes the time to reduce your price is NOW before the next rate increase.
It seems the sellers are always one or two steps behind in lowering their prices. And then when they finally do give in and lower the price, the RE market has been re-priced at yet a lower valuation due to interest rates and market conditions. The sellers become even at their reduced price.
Last sentence of my previous message should read:
"The sellers become incredulous even at their newly reduced price."
"In my estimation, every quarter point rise in interest rates takes another 2-5% off the sales price of homes currently on the market."
Do you think that applies all of the time or just in our current market?
We have had seventeen .25 interest rate increases since June 30, 2004. Home prices started to decline in my estimation late 2005, early 2006. We have had four .25 rate increases in 2006.
You are obviously right that each rate increase affects the market to the downside. However, I don't believe home prices decrease 2-5% with each .25 rate increase. There are many variables to the home price equation than just interest rates.
"It seems the sellers are always one or two steps behind in lowering their prices. And then when they finally do give in and lower the price, the RE market has been re-priced at yet a lower valuation due to interest rates and market conditions. The sellers become incredulous even at their newly reduced price."
Keep in mind we have had 1,585 single family homes and 1,051 condos sell so far this year in just Sarasota(only looking at sales south of North Sarasota/south Manatee county and as far south as Casey Key). There are properties selling out there.
By the way, the Federal Reserve has hinted that they are done with the rate increases for awhile. Two of my clients hopped off the fence this last week and bought with a 3rd one about to do the same. ;-)
Marc said:
"Do you think that (25 basis point interest rate hikes) applies all of the time or just in our current market?
I think that it applies moreso to taday's market because we're reaching a point where the lack of affordability is taking a lot of folks out of the market as potential buyers.
Generally, whenever rates get up to 8-9% the RE market tends to moderate or cool a bit. The fact that things have fallen off so quickly in Sarasota even though current rates are less than 7% is a combination of the continued trend of rising interest rates, over supply of homes (both new built and existing)on the market, inflated housing prices, and high inflation.
The government's numbers on CPI (which is essentially a measure of the inflation rate) are simply false and misleading. It's basically a gauge of how much prices for goods and services that everyone needs are rising or falling.
The last report on CPI stated that the CPI was 2.3%. Meanwhile, the Fed has been increasing money supply at a rate of over 10%. What that does is essentially de-value every dollar you have in your wallet by 10%. So when the govt. says inflation is running a tepid 2.3%, don't believe them because it's not true. We all know it's not true because almost everything we buy costs a lot more than it did 2-3 years ago.
The govt. has even gone so far as to exclude food and energy when they measure CPI. Yeah, like when was the last time anyone needed food and energy to live ?
The Fed has been raising rates to fight inflation while also increasing the money supply to counteract any expected slow down in the economy caused by those higher rates. The two don't work together as a long term benefit for the economy.
At some point the U.S. economy has to take its medicine for VERY high govt. spending, trade deficits, and low personal savings rates, among other things.
The Fed allowed rates to get too low in the last easing cycle (which lead to the housing bubble)under Greenspan's watch and now we're setting up for a pretty harsh recession. Given current economic conditions, it's inevitable.
Houses are indeed still selling in Sarasota, just simply not at the rate they have in recent years. The ones that are selling are doing so because they're priced properly and have highly desirable features and location.
The houses that will sell from here on out will absolutely need to be priced properly or they simply will not sell. And by "priced properly" I'm saying another 10%-20% lower from where we are today.
Todd said:
"The fact that things have fallen off so quickly in Sarasota..."
This is not just a slowdown in Sarasota. I have spoken to agents across Florida and the country that are experiencing the same thing. The markets that did not go up as quickly are naturally not as soft. It is fair to say that real estate markets across the nation are soft or softening. ;-)
"Houses are indeed still selling in Sarasota, just simply not at the rate they have in recent years. The ones that are selling are doing so because they're priced properly and have highly desirable features and location."
I agree.
"And by "priced properly" I'm saying another 10%-20% lower from where we are today. "
That is possible. I don't think they will drop that much.
"And by "priced properly" I'm saying another 10%-20% lower from where we are today. "
That is possible. I don't think they will drop that much but who knows. ;-)
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