Prices Continue to Rise

Letters

February chalked up another month in which sales and contracts signed exceeded the number of new listings. A recent report from Trendgraphix showed the Sarasota Real Estate Market had less than 500 existing homes and condos available for sale.

In the chart shown here, you will see the dramatic decline in available inventory over the last five years. Also of note is that for the last nearly 18 months, new listings have been nearly equal to the number of properties going under contract each month.

With the staggering surge in our area’s demand after the onset of the pandemic, these new residents and our locals seeking more space for their new remote-work lifestyles, chipped away at the remaining available properties leaving us with the lowest inventory on record.

I would typically be seeing a swell in new listings between December and February, as sellers look to take advantage of our active peak spring season. This year is anything but normal. While there are a few rare new listings that would meet the interest of my pool of eager buyers, we are still facing feverish bidding wars and properties going under contract in as little as a few hours after hitting MLS.

As evidence, my recent listing had 15 showings in the first 24 hours after listing, had several attractive offers, and was under contract in 48 hours.

When trying to compare February 2021 to 2022, it is important to remember the incredible spike in demand that began in late fall 2020 and peaked last spring. Sales this February, though less than 2021, were still greater than the pre-pandemic previous four years, and list-to-sale periods continue to contract.

As a result of the deficiency of inventory, prices continued to rise in February. Single-family homes traded at 25% higher prices than previous year, and condos rose nearly 30%. The escalation is not expected to continue at this fast a pace but will remain above historical growth rate. As properties remain scarce, prices have nowhere to go but up — the market simply cannot satisfy the unmet demand for many months.

New home builders are facing production delays because of supply chain issues — and it’s not just lumber anymore — garage doors, windows, siding, roofing material, drywall, appliances and more are not only delayed in delivery, but costs are also rising markedly. However, recent polls from the Home Builder Association indicates confidence is still very high that demand will not wane for the foreseeable future, and permitting for new single-family and multi-family developments remains solid.

As you consider your real estate goals for the year ahead, whether buying or selling, seeking property to build, an existing home or condo, or new development, having a professional with a critical understanding of the market’s current extraordinarily unconventional realities, and able to set expectations based on pragmatic and practiced conclusions will ensure your goals are achieved.

With decades of experience managing hundreds of transactions, and experiencing the Sarasota Real Estate Market’s variability, my knowledge throughout the region can help. Close relationships with my other top-performing agents in the region allows me to bring qualified buyers and sellers together rapidly and successfully in these unusual market conditions.

Whether looking to relocate to a new neighborhood, considering upsizing or downsizing, or adding to your real estate portfolio, I would be happy to discuss your next steps with you so that when the right opportunity comes along, you will be first to know.

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

 

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