As 2019 draws to a close, from a macro level, “resilient” is an apt descriptor of the State of the Sarasota County Housing Market. Inventory remains low, consistently a 3 to 4.5-month supply. With few choices, homes are on the market for about 75 days. Concomitant therewith, prices have appreciated, although modestly, at generally a 2% range, subject to the index used (median sold price, average sold price). All in all, a Neutral Market. The chart below is quite instructive. It reflects the number of Homes for Sale vs. Sold vs. Pended vs. New Listings for the last 2 years, November 2017 to November 2019.
- Homes for Sale: Down 15.3%, 2019 over 2018 (4,270 homes for sale Nov 2019 vs. 5,043 homes for sale Nov 2018).
- New Listings: Down 1.6%, 2019 over 2018 (17,194 new listings Dec 2018 to Nov 2019 vs. 17,468 new listings Dec 2017 to Nov 2018).
- Sold Homes: Up 2%, 2019 over 2018 (13,057 sold homes Dec 2018 to Nov 2019 vs. 12,796 sold homes Dec 2017 to Nov 2018).
- Pended: Down 4.7%, 2019 over 2018 (13,430 homes under contract Dec 2018 to Nov 2019 vs. 12,822 homes under contract Dec 2017 to Nov 2018).
- Average Days on the Market: Increased 5.2%, 2019 over 2018 (81 days Dec 2018 to Nov 2019 vs. 77 days Dec 2017 to Nov 2018 --- Note however, the current past quarter down to 75 days).
- Months of Inventory: Up 4.5%, 2019 over 2018 (4.6 months Dec 2018 to Nov 2019 vs. 4.5 months Dec 2017 to Nov 2018).
- Median Sold Price: Up 2%, 2019 over 2018 ($265,000 Dec 2018 to Nov 2019 vs. $260,000 Dec 2017 to Nov 2018)
- Average Sold Price: Down 0.8%, 2019 over 2018 ($370,000 Dec 2018 to Nov 2019 vs. $373,000 Dec 2017 to Nov 2018).
I have referenced that this data applies to all of Sarasota County, on a “macro” level, i.e., all homes, single family and condos at all price points. What follows is a snap shot view of the various market segments which reflect pocket adjustments based on price range/housing classification:
Condos (all price points): It is Trending to a Buyer’s Market. As of November 30, 2019, the number of for sale listings was down 9.4% from one year earlier. Likewise, the number of sold listings decreased 4.5% year over year. Months of inventory based on closed sales was 6.1 months. The average sold price was neutral, $398,000 in November, down 2.2% from last year.
Affordable (Single Family & Condos):
Up to $299,999. It should come as no surprise that the entry level, first time affordable home buyer market remains a challenge for Buyers. It is a Seller’s Market relative to the number of for sale listings, down 24.2% from one year ago. However, sales are active, having increased 3.7% year over year. What makes it a Seller’s Market is that inventory is low. As of November 2019, a 2.9 month supply based on closed sales. The good news for Buyers is that prices are neutral, the average sold price $204,000, up only 1.5% compared to last year. Likewise, average sold price per square foot was virtually unchanged, $144/sq. ft. in November 2019, down 0.7% from last year. Average days on the market, 64 days. Seller’s Market re Inventory. Neutral Market re Prices.
Mid-Market (Single Family & Condos):
$300,000 to $699,999. This is the heart, driving force of our Market, which is generally reflective of the general state of the market. And, it does not disappoint. The mid-market is Neutral. The number of for sale listings was down 13.6% from one year earlier. Sold listings increased 1.3% year over year, resulting in a 5.1-month supply of inventory based on closed sales. Sold prices are Neutral. The average sold price, median sold price and average sold price per square foot went up 1 – 2% from last year. Average days on the market has been trending on the higher side of the upper 80s. Something to keep a watch on. Months of inventory based on closed sales are neutral, ending November at a 5.1-month supply.
Luxury Market (Single Family & Condos):
Over $700,000. Buyer’s Market. As of the end of November, there were 1007 for sale listings, virtually identical to the same month last year, and at the mid-point for the past 12 months. Sold listings have been increasing, 10.3% year over year. Listings under contract have been on an upward trajectory from a low of 60 in December 2018 to 115 placed under contract this past month; and, on average 95 listings went under contract for each of the past 12 months. As of November, months of inventory based on closed sales was at a 13.4-month supply, a Buyer’s Market relative to choices. Of import, a Buyer’s Market relative to supply, does not necessarily correspond to lower prices. The median sold price is neutral, at $1,043,000 --- the average median price for each of the past 12 months was $1,038,000. Further, the average sold price is appreciating, in November $1,505,000 --- the average median price for each of the past 12 months was $1,395,000. Similarly, the average sold price per square foot is at $474/sq. ft. --- up from $448/sq. ft., the average for the past 6 months. What is the expectation for real estate values in 2020? We began to pull out of the Great Recession over 10 years ago. In our local market home prices began to appreciate in 2012/2013. Today, according to CoreLogic, our area is about 13% off pre-recession levels (BTW: CoreLogic reports that nationally the housing market is 1% above pre-recession levels). Europe, and its pillar, Germany, is tipping towards a recession. The trade war with China is at its earliest stages. From the Mid-East, Asia, Central and South America, Geopolitical and economic relationships and events, the shift in regional balances, power, influence and resultant instability are self-evident. In its wake, the US appears to be a beacon of light. Our economy remains strong and resilient. Although, our political and civil discourse is more than troubling, it, more than anything else is polarizing and dangerous to the good will, conduct, and fabric of our nation and people. Through it all, unemployment is at historic lows for every demographic group. Wages are at historic highs. The equity market is likewise at historic highs. Consumer confidence is strong. Interest rates are low. Business investment is good, if not robust. Inflation remains tame at just under 2%. Nevertheless, I do believe that an economic contraction is underway. The Case Freight Index measures the movement of tangible goods. Over the years it has proven to be an early predictor of the state of the economy. It turned negative 11 months ago, and therefore, coupled with all of the looming Geo political and economic headwinds, I believe a recession is probable by 2021. However, its affect upon real estate values, particularly in Southwest Florida will be deminimus. Today the fundamentals of the real estate market, unlike the Great Recession in which subprime lending led the way, is on sound footing. We remain a destination and place where that our feeder markets up North aspire to live. The influx from the continued migration of Baby Boomers and the coming Millenials will increase. Our tax structure is low, service, health and construction industries growing, banking system sound and general quality of life high. I have every reason and hope that 2020 will be a wonderful year. And, may your home be a safe place of joy and solitude. Whether celebrating Christmas or Chanakah, may it be merry and happy, and may your New Year be filled with goodness.
