In recent months’ real estate newsletters, I have discussed various market segments, and how I feel there is opportunity in certain niches. Today, I am taking a clear stand that we are in a seller’s market, something I have not been able to state since before the crash.
Watch my video below to find out how and why we’ve reached this point.
Why Is Sarasota Now a Seller’s Market?
There are many complex reasons a market tips more in favor of sellers, but in the most simple terms, it is because there are not as many properties for sale as there are buyers looking. See our article on the mathematics of inventory for more information on this principle.
Contributing Factors in Q2 2015
- Interest rates have begun to creep upward, the number of cash buyers is decreasing, and foreign exchange rates are showing a lot of volatility.
- The number of properties sold is up over 5%, despite smaller inventories and a perceived lack of choices.
- The distressed market decreased by about 19% to just over 14% of the market. This is a signal that fewer properties are underwater and/or more property owners in this segment feel better about their property and are able to make payments. This is a healthy sign for the local economy.
- The luxury market – properties listed for $1M and more – rebounded sharply from a moribund first quarter and sales increased over 17% from the second quarter a year ago. In the second quarter of this year, this segment now accounts for over 4% of total sales, which I have not seen since I began tracking the market in 2010. I think this signals that prices have risen and buyers are comfortable making these larger purchases.
Also for the first time, the amount of inventory sold under $200k is now less than 50% of the total market. Meaning prices are on the rise, and inventory is in shorter supply.
What Does this Mean for the Sarasota Real Estate Market?
A recent article suggested the astronomical prices achieved in 2005/2006 would be reached once again in 2017. This means that by then most property owners (who purchased during the speculative boom) should be at par or with equity available. This is a welcome relief to Sarasota property owners. Now buyers need to decide if they are investing in Sarasota real estate for the long haul, if they are speculators who are bullish on the market, or if they are staying on the fence.
While there is always controversy surrounding the local real estate market, with improvements in infrastructure, our cultural amenities, schools, and most importantly industry diversification and better-paying jobs, Sarasota is preparing itself for a self-sustaining, healthy community for the rest of the decade. Good news indeed.
