Resilience in the Luxury Market

Guest Correspondence

All price points in the Sarasota Real Estate Market experienced increased sales of 11% over the prior year in the month of April. Interestingly, all four regions of the U.S. reported a decline in transactions in the month.

The greatest number of properties changing hands in Sarasota were in the $200,000-$400,000 range, which is where many first-time homebuyers and young professionals are purchasing and also the price point where the largest growth in inventory for sale was.

In the million-dollar-and-higher tier, sales growth was more than 80% year-over-year, along with nearly 10% more pending sales inked in the month of April. The pending sales data (contracts closing in the next 30-60 days typically) indicates the luxury market will likely continue to outpace prior year – at least for the near future. Looking at year-to-date data, the higher-end homes and condos appear to be tracking consistently above the same period in 2023 with sales up 33% and pending sales growth of 19.4%.

Despite a considerable increase in available properties for sale, it appears that many buyers in the more modestly priced homes segment are hampered by mortgage rates. Now hovering in the 7% range, with economists projecting relatively little movement before 4th quarter 2024, many are still unable to make a purchase. There is a great deal of pent-up demand in the mid-market price tiers, which is unlikely to be unleashed until rates fall to 6% or below.

Generally, the mid-price points sales trends are tied to rising or declining mortgage rates, whereas luxury market fluctuations tend to be more sensitive to stock market gains or losses. With strong financial markets in the 4th quarter 2023 and 1st quarter 2024, it is believed to have prompted more buying at the top of the real estate market. And when they do buy, the majority are paying cash in Sarasota – 56% of all sales last month – compared to the national average of 28%.

With the inventory of homes and condos returning to a normalized level, buyers appear to be responding to the increase in choices, as evidenced by the growth in sales and contracts signed. Having more properties for sale is also putting pressure on price escalation, forcing many sellers to reprice their listings to remain appealing as competition intensifies for similar properties. I believe that our market has a sizeable pipeline of would-be buyers, leading me to project continued modest increases in year-over-year market performance.

In today’s ever-changing real estate market, the value of partnering with a highly experienced, locally as well as globally connected agent/broker, and a skilled negotiator and advocate cannot be overstated. Having served clients in The Sarasota Real Estate Market for 40 years and carefully analyzing our business conditions, I have developed essential insight to assist both sellers and buyers in achieving their objectives.

Buying homes takes a good bit of strategy. As new listings come on the market there are many eager buyers waiting to jump at a property that can meet most of their wish list. Buyers need to be prepared to communicate their primary goals to their realtor so that we can alert you as soon as we hear of something that is coming on the market or has listed and checks most of your boxes.

Michael Moulton is a Realtor with Michael Saunders and Company.

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