Publised February 18, 2024

This month’s focus is on inventory, specifically the increasing supply of homes for sale. I expect inventory will continue to grow all year long. As mortgage rates go, so goes inventory. As rates rise, more buyers move to the sidelines, inventory and days on the market grow, prices fall. When rates fall, more buyers enter the market, inventory and days on the market shrink, prices go up.

The Federal Reserve’s monetary policy has been restrictive, i.e., conservative. It does not want to stoke inflation. Jobless claims are its most critical data line. The harsh reality is the Fed wants higher unemployment to break inflation. Currently 3.7%, there will be no easing of its restrictive monetary policy until unemployment breaks above 4.5% and jobless claims exceed 300,000. For the week ending February 10, the Labor Department reported applications for unemployment fell by 8,000 to 212,000.  Accordingly, rates are not coming down in the immediate term. It is the reason on Friday, February 15, the 10-year Treasury Rate rose to 4.30%, and the 30-year conventional mortgage moved higher to 6.77%.

The Inventory of single family homes for sale continues to grow in Sarasota County.  For the week ending February 9, 2024, there were 3,139 homes for sale, 55% more than last year at this time. In fact, there are currently 11.5% more homes for sale than February 14, 2020. Similarly, it is taking longer to sell homes. For the week ending February 9, homes were for sale for a median 70 days, 20% more than one year ago.

As rates and inventory have moved higher, active listing prices have come down. For the week ending February 9, the median list price per square foot was $304. Last year at this time the median list price was 7% higher, $327 per square foot, Although lower than last year, median active list prices are still  33.55% higher than 4 years ago.  If you’re considering selling now, you’re still assured of a strong profit.