Sarasota County: April 24. 2025

Material stats for home sales in March, active (unsold) homes in April:

• Sold Homes. The number of single-family homes sold rose 4.6% from March 2024.
• Average Sq. Ft. Sold Price. The average square foot sold price dropped 11.5% but has flatlined the past 3 months to $346/sf (Jan$346, Feb $344, Mar $348) data points to a bottom.
• Median Sold Price. The median sold price was off 6.2% from Mar 2024, although unchanged from last month (Feb 2025).
• Inventory levels. Months of supply based on closed sales was 5.6 months in Mar 2025 (6 months is considered a balanced market).
• Ratio of Sold Price to List Price and Price Reduction Percentages. 90% is the percentage spread between original list price and sold price. 94% is the ratio between final list price (after reductions) and sold price. For the week ending April 18, 2025, 58% of all active listings had price reductions, 30% is the normative percentage. This indicates too many sellers’ initial expectations of market value and pricing are not aligned with current market values. The key is to price a home to where the market is, not where you want it to be.  

1. COVID Migration Reversal & Market Stabilization

During the pandemic, markets like Texas and Florida saw rapid price growth fueled by a surge in inbound migration. That trend has now reversed, and we’re seeing price corrections — not crashes — in overheated markets such as Austin and Sarasota. Inventory has returned to 2019 levels, signaling a normalization rather than a downturn.

2. Tariffs, Inflation, and Economic Sentiment

Tariff increases, far exceeding market expectations, have created extreme volatility in equity and bond markets, reintroducing uncertainty and inflationary pressure. Should policy ease, my hope and politically salient, it could offer market relief and restore confidence. If tariff policy does not soften, inflation, recession or stagflation are possible. The Federal Reserve remains attentive to inflation and labor market data as it considers future rate decisions.

3. Recession Perspective

Talk of a potential recession continues, but historical trends show most downturns are brief. Recovery typically brings rate cuts, which tend to benefit housing in the long run.

4. Rate Outlook and Housing Demand

If inflation continues to cool (congressional passage of a predictably low tax and spending budget are needed) and unemployment and jobless claims rise, the Fed should begin easing rates. The Treasury bond market, particularly the direction of the 10-year yield, currently 4.3% range, more directly affects mortgage rates. If the yield falls to 4% range, we should see mortgage rates approaching 6%. That could bring sidelined buyers back into the market. Importantly, many areas—especially in Florida—remain cash-heavy, which helps maintain stability even amid rate fluctuations.

5. A Healthier Market Environment

The market today is more balanced than it has been in years:

• Inventory is up, pricing is more realistic, and buyer-seller dynamics are more grounded.
• Provided the volatility in tariff policy eases, there are no indicators suggesting major price movement from current levels.
• Buyers can benefit from locking in prices now, with the potential to refinance, and lower their fixed costs if rates fall.
• Sellers motivated by life events have little reason to wait. Prices are unlikely to move materially higher, if at all, this year.