June 2007 Sarasota home sales figures good
Good news - June 2007 home sales were up in Sarasota/Bradenton when compared to June 2006. Sales were 5% higher last month than from a year before. The rest of Florida did not make out so well. Only two real estate markets in Florida showed sales increases year over year from June 2006 to June 2007.
Are we bottoming out or is just an anomaly? I would be interested to hear your comments.
Notice the Sarasota-Bradenton home price for each month - $292,700 in June, $294,700 in May, $294,800 in April, $291,500 in March and $294,500 in February. Median home prices are no longer plummeting.
The next few months should report good sales figures as well since we have over 500 pending home sales. That would mean back to back months of positive sales figures.
Inventory levels seemed to have peaked as well. In fact, there has even been a small decline.
Are we bottoming out or is just an anomaly? I would be interested to hear your comments.
Notice the Sarasota-Bradenton home price for each month - $292,700 in June, $294,700 in May, $294,800 in April, $291,500 in March and $294,500 in February. Median home prices are no longer plummeting.
The next few months should report good sales figures as well since we have over 500 pending home sales. That would mean back to back months of positive sales figures.
Inventory levels seemed to have peaked as well. In fact, there has even been a small decline.
- Inventories most likely peaked and possibly dropping
- Mortgage rates still historically low
- Home prices in Sarasota are off 25%-30% from 2005 market highs
- Sales numbers increasing
Falling supplies + good demand = more balanced real estate market
Labels: Sarasota real estate news
posted by Marc Rasmussen at
7:36 AM
8 Comments:
I do not feel that inventory levels will fall substantially until prices decline significantly further (another 20%-30%, in many cases).
The homes that ARE selling in Sarasota are those which are in better condition, in better locations, and at lower prices than the competition.
I still see MANY homes throughout all of Sarasota County that are way overpriced. In many cases they are the same homes that have been on the market for a year or more, and they've continually been priced above "market prices."
Those sellers continue to chase the market down.
More weakness likely lies ahead for the local RE market until prices fall further and inventory levels fall closer to the long term average, IMO.
Thanks for the feedback Todd. I don't think pries will drop another 20-30% but time will tell.
You are right about the large number of homes on the market that are way overpriced.
Marc said:
"You are right about the large number of homes on the market that are way overpriced."
Then we don't disagree - because it's all those overpriced properties that will bring prices down 20%-30%.
The reason prices still have much further to fall, IMO, is because the amount of legitimate buyers is rapidly dwindling. This is caused in part due to tighter lending standards.
I've heard/read from those who feel a bottom is in place that there are lots of buyers out there who are simply waiting until they see more evidence of a bottom before they buy.
I maintain that those "buyers in waiting" will only buy the very best properties at the very best prices - which is what usually happens when a market goes through a severe correction. Their buying will not take the necessary inventory off the market, so prices will need to fall further to attract more buyers..
"Then we don't disagree - because it's all those overpriced properties that will bring prices down 20%-30%."
That is possible. It is also possible that a lot of the listing will just be taken off the market.
"The reason prices still have much further to fall, IMO, is because the amount of legitimate buyers is rapidly dwindling."
I agree that lending has tightened up. I'm not sure "rapidly dwindling" accurately characterizes the number of buyers out there.
"I maintain that those "buyers in waiting" will only buy the very best properties at the very best prices"
That happens in any kind of market. It happened in 2004/2005 but just in larger numbers.
"Their buying will not take the necessary inventory off the market, so prices will need to fall further to attract more buyers.."
Or a combination of lower prices and sellers who don't need to sell taking their properties off the market. A trend in lower inventories will prompt more buyers to get off the fence. In that situation prices won't come down as much.
I get inquiries from buyers on a daily basis. They are out there and just work on their own schedule.
So far this is my second best year in the business with the possibility of selling more than I did in 2005.
"So far this is my second best year in the business with the possibility of selling more than I did in 2005."
Your ability to prosper during a rough spot in the RE market does not signal that the market has bottomed. It's more likely a reflection and combination of your ability and willingness to change your strategies to the needs of the current market.
It might also have something to do with your changing RE agencies - going to to the higher end market where there are more legitimate buyers. It might also be because you're working harder. Only you know.
But it is not a sign that the local market is/has bottomed, IMO.
I was not really implying that since I am having a good year that the market is bottoming.
I just wanted to toot my own horn. ;-) Just kidding.
I just wanted to change this misconception that many people have that nothing is selling.
This excerpt from Robert Toll, CEO of Toll Brothers - the nation's leading luxury builder.
Horsham, PA, August 8, 2007 -- Toll Brothers, Inc. (NYSE:TOL)
"However, we caution that, with the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit markets settle down. In the near term, tightening credit standards for borrowers should reduce the pool of potential buyers: Liquidity and affordability issues may impede some customers from closing, while others may find it more difficult to sell their existing homes."
"Excess supply exists in most markets and there is concern that additional inventory will emerge due to mortgage defaults. Although some markets have remained strong and some appear to be stabilizing, albeit at much lower activity levels, most markets remain weak."
Marc Rasmussen said:
"I just wanted to change this misconception that many people have that nothing is selling."
Marc, I don't think the media or economists have been saying that "nothing is selling." What they have been saying is that things have slowed down dramatically in the RE market, and we all know this is true.
What I am putting forth is that the notion that originated from the local realtor's association that now is "the time to buy" - because you'll miss the boat on the low prices - is pure BS.
The local RE market is languishing in continued weakness. Sales numbers have stabilized somewhat in recent months, but IMO it's premature and entirely irresponsible for the local realtor's association to declare that the market has bottomed.
Anyone who reads the recent comments of Bob Toll can see that today's RE problems have yet to be cured, and more weakness unfortunately likely lies ahead.
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