I believe we are caught in the cross-hairs of a Market Shift.  In January, Listings increased dramatically, while Sold Homes decreased, pointing to a Buyer’s Market.  Of the homes that sold, there was a slight increase in the sold price.  This may be a carry-over from the fall of 2018, when there was less inventory.  If inventory continues to increase, with fewer sold homes, buyers will be in control, and sellers will begin to adjust their listing and sale price expectations.   Sellers may have already begun the process of adjusting their expectations.  Pending sales increased dramatically in January.  Over the next 2 months, as these pending sales close, I forecast a softening on sold prices, and a lowering of list prices.

What follows are some of my thoughts and observations from the buyers and sellers I am working with, and from what I read, study, and instinctively know:

1. Baby Boomers, our primary feeder source, have never seen this level of political discourse, cultural fracture, and it makes them uncertain.
2. Today’s observations will become our stats in 3 to 6 months.  I saw these trends come and go in my 35+ year career as a Real Estate Closing Attorney.  We always saw, from new Title Orders coming in the trends, 3 months out, before they were reported by the press due to the time it takes to go from Contract to Closing.
3. Stock Market volatility this past year has made people weary.  There are looming headwinds from: a weakening European economy, the weakest pace in 4 years; a weakening Canadian economy, our #1 foreign feeder market; trade tariff disputes with China, and a weakening Chinese economy; as time passes the easing of benefits from the 2017 tax cut; the ebb and flow of interest rates; and the political and cultural polarization in our nation. It all creates an atmosphere of uncertainty.  Buyers are double checking everything. Today, buyers have no unbridled enthusiasm.  They are cautious, and they are savvy.
4. We see more Veterans taking advantage of VA loans, which, in many areas of Sarasota County permit loans of up to $483,000.
5. We are seeing Buyers wanting to sell before they buy. If they are buying another home in the area, more Buyers are submitting Offers contingent upon the sale of their home.  If they are leaving the area or state, they are more concerned with selling their home first, rather than buying their new home.
6. We are seeing Buyers more worried about their finances than their personal comforts.
7. In Sarasota County, home sales have declined for 10 consecutive months, excepting October, which saw a slight uptick, then went back down in November to January. Likewise, condo sales went down for 10 consecutive months, excepting November, which saw a slight uptick, then went back down in December and January.
8. Similar uncertainty is found in the luxury market, homes over $1,000,000, which have a “trickle down” effect on the over-all market. When it comes to the supply of homes, the Luxury Market is a Buyer’s Market: The number of for sale listings was up 17.9% from one year earlier; the number of sold listings decreased 31% year over year; and months of inventory based on closed sales was 18 months, up 71.3% from last year. As to prices, The Luxury Market is a Neutral Market: The average list price was down approximately 1% from last year at $2,407,000; the average sold price was $1,789,000 in January, down 8.2% from last year; and the median sold price was $1,375,000, down 6.8% from last year.
9. Nationally, consumer sentiment hit the lowest level in more than 2 years. The University of Michigan reported that its consumer sentiment index was 91.2 in January, down from 98.3 at the end of last year.  This was the weakest sentiment figure since October 2016.  This may be due to the partial government shutdown, tenuously resolved for now, but continued dysfunction in Washington can be a drag on the economy and consumer sentiment. The Labor Department’s employment report for January did show stronger than expected jobs growth (100^th straight month of increased employment), and the Institute for Supply Management’s manufacturing analysis signaled growth picked up for US factories.  Consumer spending remains solid.

So, here is my advice in a shifting market.  You need to define – What is My Objective?  How you proceed in this market is crucial.  The use of seasoned professionals with broad market expertise is very important.  There is always opportunity in a changing market.  Use this information to create a positive path or course of action whether you are a Buyer or Seller. Take advantage of the change, the market shift.

If you are selling, target your objectives based on your end goal, and sell, don’t hold.  Get aggressive in your pricing.

If you are buying, be prudent, do your homework, learn all about the community.  Learn all about the particulars: comparable properties; function and form; architectural and design trends; square foot; price; days on market; seller motivation; upgrades; lot location — in essence, everything that affects price, the home’s fair market value.  Most of all, buy with an eye toward resale, not just the best deal.

Stats for January 2018:

Single Family Data:

• Homes for Sale – 3,485; up 19.7% from same month last year (Jan 2018); up 13.3% from last month (Dec 2018).
• New Listings – 1,316; up 5% from same month last year; up 94.4% from last month.
• Sold Listings – 444; down 14.5% from same month last year; down 12.3% from last month.
• Pending Sales – 750; up 2.5% from same month last year; up 62.3% from last month.
• Months of Inventory Based on Closed Sales – 7.8 months; up 39.2% from same month last year; up 28% from last month.
• Months of Inventory Based on Pending Sales – 4.6; up 15.1% from same month last year; down 31.6% from previous month.
• Median Sold Price – $280,000; Up 1.4% from same month last year; no change from last month.

Condo Data:

• Homes for Sale – 1,487; up 12.8% from same month last year (Jan 2018); up 8.8% from last month (Dec 2018).
• New Listings – 472; up 7.5% from same month last year; up 84.4% from last month.
• Sold Listings – 131; down 41.8% from same month last year; down 9.7% from last month.
• Pending Sales – 273; down 12.8% from same month last year; up 123.8% from last month.
• Months of Inventory Based on Closed Sales – 11.4 months; up 93.9% from same month last year; up 21.2% from last month.
• Months of Inventory Based on Pending Sales – 5.4; up 15.1% from same month last year; down 31.6% from last month.
• Median Sold Price – $270,000; down 12.9% from same month last year; up 24.4% from last month.