Typically, when you see consistent demand and a large increase in supply there is downward pressure on price. This doesn't necessarily mean Sarasota home and condo prices will decline. It is too early to for that. It does mean home buyers have more options and sellers have more competition.
Tracking Supply and Demand
The number of Sarasota county listings for sale was up 30.9% from one year earlier and up 4.2% from the previous month. The number of sold listings in Sarasota county decreased 2% year over year and increased 11.2% month over month. The number of under contract listings was up 0.3% compared to the previous month and up 9.9% compared to the previous year. The Months of Inventory based on Closed Sales is 5, up 31.9% from the previous year.
The Average Sold Price per Square Footage was up 1.1% compared to the previous month and up 1.1% compared to last year. The Median Sold Price increased by 2.1% from last month. The Average Sold Price also increased by 3.4% from last month....
Have you ever thought about buying a pre-construction condo for investment purposes? This is a game many people want to play and it is usually only played by the wealthy because of the high prices that new downtown Sarasota condos typically sell for.
There can be a mad rush to buy when a new condo building is released. Early buyers will typically buy at lower price levels because the developer will eventually raise prices as more and more condos are sold. Do these investors make any money doing this?
Below you will find a variety of condo buildings in downtown Sarasota. I pulled sales data from when the units were purchased and then sold. It typically takes 24 months to build a condo. The purchase date is when they closed on the property. In most cases the units were sold well before the closing date. For example, unit 1101 in the Ritz Carlton was closed in November 2001 for $1,260,000 but the price was established up to 2 years prior to that when they released the units (pre-construction).
Gain and loss figures do not include Realtor fees as well as the ongoing carrying costs of a condo - association fees, contents insurance, maintenance and property taxes. The figures are purely just sales price.
Ritz Carlton Residences
There was an article in the Sarasota Herald Tribune recently (read it here) about a new 18 story luxury condo tower will be built next to the Ritz Carlton in downtown Sarasota. The new project will be called The Grande. For those Realtors selling in the mid 2000's, The Grande was a condo project planned to built where The Vue is now sitting. The project was scrapped when the Sarasota real estate market popped.
The Kolter Group plans on building 86 residences that will offer services managed by the Ritz-Carlton. Prices for 3 and 4 bedroom units will run from $2,000,000 to $5,000,000. The new tower will be built east of the hotel over the support facilities.
Is there a downtown Sarasota luxury condo glut on the way?
How Many $2,000,000+ Condos Have Sold in Downtown Sarasota?
Are you considering a purchase or sale in Lakewood Ranch? The charts below may assist in your decision.
5 Years of Lakewood Ranch Activity
If you remember back in economics class prices are primarily dictated by supply and demand. Obviously, with an increase in the number of homes for sale in Lakewood Ranch there will be downward pressure on price. That does not mean prices will decline. If demand stays strong prices could stay the same or continue to rise.
Recent Sales Activity in Lakewood Ranch
Below is a chart of sold, pended sales and active listings for the last 18 months in Lakewood Ranch.
Months of Inventory in Lakewood Ranch
In the last three months Lakewood Ranch's months of inventory rose and is hovering between 6 and 8 months. Prior to January inventory was hovering around 4 months. That is a pretty substantial increase. This is something to definitely keep in mind if you are currently trying to sell your home.
What Should Sellers Do?
If your Lakewood Ranch home is currently listed then you should reassess your position in the market. Here are some questions...
Is this the end of a boom cycle in the real estate market? It is too early to tell but some believe so. Below I provided graphs of inventories levels in Sarasota, Manatee, Longboat Key, Siesta Key, Lakewood Ranch and the downtown area.
What We Don't Want
It is part of our job to monitor real estate market stats like inventory levels, sold properties and pending transactions. We just don't want to see this happen again:
The above graph shows January 2004 to January 2006 inventories. They went from a low of 5,002 in September 2004 to 17,457 in January 2006. That is a 349% increase in inventories which ultimately caused the real estate bubble to burst.
Personally, I don't see this happening. There are several differences between these two markets. Many of the buyers today paid cash which creates a stronger market. Lending guidelines did tighten so most people who bought had to prove income and the ability to repay their loan. Prices escalated but not as quickly as they did from 2003 to 2005.
We will keep watching and reporting what we see. Stay tuned.
Sarasota & Manatee Counties Combined - Inventories up 6.3%
Sarasota County - Inventories up 5.6%
Manatee County - Inventories up 7.3%
The post below is from our other blog at DwellingWell.com. You can read it here - Season Update - How is the Sarasota Market?
Last month we were one of the first brokerages to start talking about the slow down in the Sarasota real estate market. After I wrote the blog post I received phone calls from many area Realtors confirming the slow down. Some real estate professionals will only talk about a slow down behind closed doors but are afraid to discuss it publicly. The Sarasota Herald Tribune decided to write about it as well - Read here. Here is my original post talking about how January 2016 had fewer home sales than January 2015 - January 2015 vs January 2016.
Below you will find data showing sales stats comparing February 2015 to February 2016 as well as comparisons over a longer time period of both January + February of each year. If you want to skip all of the gritty details and just see the conclusions click here.
Below is a chart showing sold, pended and properties for sale in Sarasota county. Compared to February 2015, Sarasota county has 5.6% more homes and condos for sale, 7.8% fewer sales and roughly the same number of properties pended this year.