Sales in 2nd Quarter at Highest Level Since 2005Posted by Marc Rasmussen on Tuesday, July 17th, 2012 at 11:58am.
More good news about the Sarasota real estate market. The Sarasota Association of Realtors issued the following press release today.
With 864 closed sales transactions in June 2012, the Sarasota real estate market achieved the highest level of quarterly sales in seven years, with 2,604 sales from April through June. The 864 closed transactions in June was also the second highest total since September 2005, yet another indication of a market that is achieving sales totals not seen since the 2003-2005 real estate surge.
The totals for June were 603 single family homes and 261 condominiums, for the combined 864 closed transactions. Sales were 18.7 percent higher than in June 2011, when there were 728 closed transactions. The June sales almost reached the April 2012 figure of 886, which was the highest total in seven years. The normal seasonal influx of buyers tends to drop shortly after the Easter holiday, but this year the higher sales appear to be continuing into the summer.
However, pending sales (which represent properties that went under contract during the month) did decrease in June, dropping to 860 after four straight months that topped 1,000. Pending sales are a major indicator of the future market sales totals. Last year the pending sales also retreated, from 841 in May to 754 in June, and this meant the spring surge finally did slow down in July. The current numbers seem to indicate there remains strength in the market dynamics through the middle of the summer.
"I've been observing this market for some time, and the enthusiasm of local agents hasn't dropped a bit," said SAR President Laura Benson. "Sarasota is clearly the place to be if you work in the real estate industry. Agents I've spoken to are very, very busy trying to keep up as the buyers explore our market for the best deals."
The median sale price for both categories remained near the highest levels of the year in June. The median sales price for single family homes dropped slightly to $178,500 from last month's figure of $185,000, and higher than the 12-month running median of $167,000. The median sales price for condos was $195,000 - up from last month's figure of $180,750, and still much higher than the 12-month running median prices of $165,000.
Single family home prices remained at a level more than 30 percent higher than the low of the market reached 15 months ago ($137,500), while condo prices are over 50 percent higher than the low point ($127,000). Part of the reason for the price resurgence remains likely related to the lower number of distressed property sales. The total number of distressed sales, foreclosures and short sales, remained around 31 percent, the lowest level in three years.
For the second quarter of 2012, distressed property sales dropped to 32.4 percent from the first quarter's level of 36.2 percent. The quarterly numbers show a market recovering from the low point in the third quarter of 2010, when distressed sales represented 51 percent of the total.
In addition, the disparity between the median sale prices of distressed properties versus normal market sales has remained fairly steady for the past two years (eight quarters). Non-distressed properties are selling at almost three-times the price of foreclosures, and almost double the price of short sales. In the most recent quarter, the median price of foreclosed single family homes was $93,000, while the median of non-distressed homes was $235,000. Condos are showing a similar ratio - $83,000 for foreclosures, versus $240,000 for normal market sales.
The available inventory of homes on the market once again dropped to a new decade low of 3,816 from last month's figure of 3,917. High sales and low inventory has also dropped the months of inventory to new 10-year lows. The June figures are 4.1 months of inventory for single family homes and 5.2 months inventory for condos - almost identical to May's figures - 4.3 months and 5.2 months, respectively. Months of inventory represents the time it would take to deplete the current inventory at the current sales rate. Last June, there were 5.9 months of inventory for single family homes and 8.2 months of inventory for condos. At the market's low point in November 2008, there were 24 months of inventory for single family homes and 41.7 months for condos.
"Economics 101 teaches that supply and demand rule a market," said Benson. "As the available properties continue to drop, and competition for them remains high, we would naturally expect asking prices to rise, and that's what we've witnessed. The only things holding back this market at the present time are the higher level of distressed properties, which weighs down on overall prices, and tight credit policies, which limit the number of qualified purchasers."
Currently, only 604 properties for sale in the MLS are listed as short sales or foreclosures, up slightly from last month's figure of 576 properties. This represents about 16 percent of available properties, slightly higher than last month, and down from January 2012 when the figure was 17 percent of the market.
"We have been wading into a seller's market for a few months now, with the months of inventory below 6 months," said Benson. "It will be interesting to see how the next few months unfold in our market. We've had remarkable numbers even with the economy still in relative doldrums, and other tensions in the U.S. and the world. We're usually fairly insulated here in Sarasota because of our tremendous assets - wonderful weather, beautiful beaches and golf courses, and our great cultural climate. I don't see anything stopping this market."
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