Market Continues Its Heatwave

Real Estate

BY MICHAEL MOULTON SRQ DAILY SATURDAY PERSPECTIVES EDITION SATURDAY JUL 25, 2015

While I predicted another strong month ahead, I couldn’t have imagined a May with as many important market metrics again hitting such heights. The Sarasota Real Estate Market transactions in May were the second highest in the last 15 years, coming in just a handful less than recorded in May 2013, which was our record setter.  Trendgraphix reported that pending sales, our forward-looking barometer, reached a 15-year high for the month of May, beating last year’s new record by an impressive 11 percent.  Sarasota’s median prices for both condominiums and single-family homes rose nearly double the State of Florida’s average and that of the entire nation!

National economists and industry strategists have opined that the national real estate market is 2-3 percent overvalued, a position they believe is healthy.  When you compare it to the market in 2006 when the same experts declared the market was 26 percent overvalued, it seems that the current pace of acceleration in the price of homes is the type of growth that is sustainable.

Now that we have moved into summer, our traditionally slower season, I do expect some less spectacular growth than we have seen these last several months, but I do foresee continued momentum in a year exhibiting every sign of achieving new records, but doing so in a measured and sustainable fashion.

Though in last month’s report I suggested that our shoulder season would continue to be “hot,” even I was a little surprised to see May come in ahead of last year’s robust action.  Since the market low in May of 2007, the number of properties closed in the Sarasota Real Estate Market has more than doubled.

  • Total sales in May in the Sarasota Real Estate Market increased 7.5 percent from May 2014.
  • The national picture finally warmed up with sales besting last May by 9.2 percent.
  • Distressed sales (short sales and bank owned) as a percentage of total sales have continued to fall. In May those sales were 15.9 percent of total sales in Sarasota, considerably below the 50 percent mark at the bottom of our housing market.  Most of the sales of distressed properties are in price points below $500,000.

For another consecutive month, the Sarasota Real Estate Market experienced extraordinary activity for properties going under contract. While it dropped a little from April’s peak, which is expected in our shoulder selling season, according to Trendgraphix year-over-year showed impressive growth, the 2nd highest in 15 years. This data is one of our best devices to project future sales activity, and to have such a strong transaction flow late in our peak selling season gives weight to my expectations for a summer “heatwave!”

With new construction of many projects reaching either full-reservations for their units or readying for closings and new resident move-ins, the strong international traffic that our summers typically provide, the vast population of baby boomers ready to plan for their retirement, many homeowners return to equity in their current homes freeing them up to either purchase vacation homes or “move up,” the summer skies ahead look sunny to me!

Michael Moulton is a certified residential specialist broker-associate with Michael Saunders and Company

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