Sales Slow as Fed Raise Rates, But Prices Still Climb

Todays News

Interest rates are pushing inventory numbers higher in Sarasota and Manatee counties. But prices continue to rise in the region, according to the Realtor Association of Sarasota and Manatee. That is taking place ever as the Federal Reserve takes steps to cool the market and calm inflation.

There were considerably fewer closed sales in the two-county market in June. The Association reported 2,088 sales for the month in the North Port-Sarasota-Bradenton metropolitan area compared to 2,849 in June of 2021. That’s a 26.7% decline.

“While we're continuing to see month-over-month and year-over-year increases in pricing, the number of closed sales has dropped down to a level that was more typical for a pre-pandemic June,” said Tony Veldkamp, Realtor Association president and a senior advisor at SVN Commercial Advisory Group.

A slow in sales has meant an increase in stock. A year ago, there was barely half a month of residential properties available in the market. But there’s still a short supply on a grander scale, Veldkamp said.

“Meanwhile, the amount of active inventory continues to grow by more than double the number of listings from where we were this time last year. At less than a two-month supply of single-family homes, we are still far from having the six-month inventory required for market equilibrium. The market is shifting as we're seeing changes in the buying process, but today we're still in a seller's market.”

June sales wrapped well before the Federal Reserve decision last week to raise its benchmark interest rates by 0.75% at a July meeting. The Fed in June also voted mid-week to raise rates. That means in the last two months, the benchmark rate jumped from 1% to about 2.5%, part of an effort to rapidly cool inflation.

For the moment, the boost in inventory and climbing rates have not stopped a continuing increase in the median price of homes in Sarasota and Manatee counties. For the first time ever, the median price for single-family homes in Sarasota rose to $500,000. That’s a 25% year-over-year increase. It boosted ever higher in Manatee County to $550,000, a 35.7% hike from last June.

Similarly, condominium unit prices swelled. Manatee County now reports a median price for condo and townhome sales of $356,500, and in Sarasota, the median price sits at $416,250.

While sales have slowed and inventory has started to climb, homes still aren’t sitting on the market for long. The media time reported for condos to go under contract in the market is about seven days. The same goes for houses in Sarasota County, and in Manatee, single-family homes are selling even faster with a median time on market of six days.

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