May existing homes and condominiums activity in Sarasota continued to see strong demand and tight inventory. The luxury tiers of the Sarasota Real Estate Market have experienced a welcome stabilization in the first five months of 2023. Average sold prices have been nearly identical since the start of the year and, while sales have fluctuated a bit, they have also found a normalized pattern when compared to the previous two years.

In the attached chart you will see year-over-year five-year comparisons for the Month of May.

Notable is the improvement in inventory for sale in the Sarasota luxury price tiers. Not unusual is also an uptick in the time from listing-to-sale periods as a result of the higher number of properties for sale. When comparing all statistics to pre-pandemic 2019, these data points are still showing growth in the key areas of inventory and prices, and lesser days on market.

Also of importance is taking a look at how pricing is trending. Year-over-year average and median sale prices in the Sarasota luxury market are showing some interesting dynamics. First, as in other data we watch, median pricing continues to grow at a lesser trajectory than during the COVID rush. 

Average luxury tier sale price appreciation is tempering as buyers and their Realtors are becoming more savvy in negotiating some still elevated seller expectations. In May 2022, the differential of list-to-sold price was 95% of original listing. In May 2023, the variance of sold properties was 89% of listing price. Sellers who are ready to move on with their postponed plans to transition to a new home or condo need to understand current market conditions and joining with an experienced market leader – like me – will deliver the best results.

Recent reports on the increasingly strong pace of building and sales of new homes are reassuring, as they are helping to bring our market closer to a balanced position, easing a long-term seller’s market. In May, the country’s inventory of properties for sale had new homes representing 31% of the total compared to the norm of 10-15%. This was a 20% increase over last year.

Affluent buyers are focusing their attention on properties that are not just well-located but more importantly centered on well-being. Newer or thoughtfully renovated homes that provide a more “lived in” feeling with comfort, warmth, more options for outside living, smart technology and wellness amenities better meet this group’s aspirations. In fact, designers are seeing a shift from the cool greys that dominated décor over these last many years. To meet the desire for that more comfortable home, buyers are now favoring palettes with warmer neutrals and furnishings with a softer feel, pops of color, a mix of patterns and natural finishes and showcase pieces to highlight.

Growth in overall inventory is promising, but pace is slow month-to-month and still far from meeting demand. Homeowners sitting on mortgages under 4% are reticent to sell. Industry experts are projecting that interest rates will need to fall to a sustained 5% level to motivate a meaningful number of would-be sellers to list their properties. The 30-year fixed rate rose to over 7% last week.

Despite the interest rate issue and other economic concerns, The Conference Board stated that consumer confidence is currently at a 17-month high. The National Association of Home Builders also reported increased confidence within their membership. While builders continue to face rising costs, supply chain and labor issues, they feel strongly demand will keep consumption of new construction swift.

Luxury tier sales of single-family homes and condos have remained relatively stable since the start of the year, with March, April and May all exceeding the previous eight months. Pending contracts signed followed the same pattern. May’s 37% increase from the prior month was clearly tied to the growth in inventory, which has nearly doubled since the same month last year. Stability of average and median sale prices also signals healthy market conditions. I remain confident that demand for high quality and well-located Sarasota homes and condominiums will keep our sales on a similar course for the foreseeable future.

Michael Moulton is a Realtor with Michael Saunders and Company.