Halfway through 2016, housing market continues to show life.
Sales are down, but prices are up.
By John Hielscher email@example.com
Halfway through 2016, the Southwest Florida residential real estate market has shown a steady trend: sales are down, but prices are up.
Sales of existing single-family homes have tumbled by 4.6 percent in Sarasota-Manatee and by 7.8 percent in Charlotte through the first six months of the year, according to statistics released Thursday by the Florida Realtors trade group.
Home sales have dropped every month so far this year, but real estate agents say the market was bound to cool off after record-setting years in 2014 and 2015.
Single-family sales in June, which reflect contracts signed one to two months earlier, were the highest for a month so far in 2016.
“The market seems to be balancing out compared to the high number of sales we saw last year,” said Linda Formella, president of the Realtor Association of Sarasota and Manatee.
But prices are a much different story.
At mid-year, the median sale price of a single-family home rose 6.9 percent to $262,000 in Sarasota-Manatee and 11.7 percent in Charlotte to $189,980 compared with the same point in 2015.
“The rise in median prices reflects the continued popularity of the area and the impact of our current low inventory levels,” Formella said.
Those rising prices — with some months posting double-digit annual gains — may be squeezing sales.
“Buyers in the $400,000 to $900,000 range have been balking all year about the current asking prices,” said Charryl Youman, an agent with Berkshire Hathaway HomeServices Florida Realty in Venice. “Many just don't see the value. Because if you have a listing in that price point, you are already competing with new construction, big time. And sitting on the market longer, with very few looks.
“The more affordable homes continue to fly off the shelf. We are solidly into our condo buying season. Buyers at $1 million-plus don't seem to be as concerned. It's that mid point in asking price that is most challenged right now,” she said.
Buyers closed on 13,378 existing homes and condos in the three-county region during the first half of the year, down by 527, or nearly 4 percent, at the same point in 2015.
Single-family sales totaled 9,355, off by about 5 percent, while the 4,023 condo sales were slightly ahead of last year.
Condo prices increased 11.7 percent to a median $199,950 in Sarasota-Manatee but just 1.6 percent to $137,450 in Charlotte.
Pending sales for homes and condos were down 25 percent over the year in June in Sarasota-Manatee, signaling slower sales this summer.
That would be a “more typical trend,” the association said in its report, than last year when sales stayed strong through August.
The stock of single-family homes for sale is 20 percent higher in Sarasota and 17 percent in Manatee, while the condo inventory is 36 percent higher in Sarasota and 17 percent in Manatee.
Distressed sales — foreclosures and short sales — accounted for 6.3 percent of all sales, half of what they were last year.
Statewide, buyers closed on 27,086 single-family homes in June, up 0.4 percent. Condo sales were down 2.6 percent to 10,506, Florida Realtors said.
Homes throughout Florida traded for a median $225,000, 10.8 percent more than last year, while condos sold for $164,000, an 8.6 percent gain.
“Much of 2016's slowdown in sales growth is due to the dwindling inventory of distressed properties throughout Florida,” said Brad O'Connor, chief economist at Florida Realtors. “In June of last year, about 20 percent of sales across all property types were of the distressed variety. This June, only 10 percent of sales were distressed. These declines are not due to a lack of demand, but rather a clear lack of supply. Florida's distressed properties continue to slowly but surely work their way through the pipeline.
“If distressed properties are taken out of the equation, sales growth among non-distressed properties — the traditional market — remains quite strong. Non-distressed single-family home sales were up 13 percent year-over-year in June, while non-distressed sales of townhouses and condos rose by 7.6 percent,” he said.
Nationwide, Americans bought more homes in June, the fourth straight monthly gain as the sales rate reached its highest level in more than nine years.
The National Association of Realtors said sales of existing homes rose 1.1 percent last month to a seasonally adjusted annual rate of 5.57 million, the best performance since February 2007. Buyers are quickly making offers amid tight supplies of homes on the market, boosting prices as the traditional buying season reached its crescendo. The solid job market and mortgage rates near historic lows have kept demand steady, even though the number of listings on the market has dropped.
But continued sales gains appear to be limited this year because of the acute shortage of listings. The meager supplies have fueled price growth that has eclipsed wage gains while forcing buyers to either save more for down payments or borrow more heavily. The result is that sales likely peaked in June, as data from the Realtors show the pace of signed contracts and open house visits have slipped.
The median home sales price was $247,700 in June, up 4.8 percent from a year ago. That increase is roughly double the pace of average hourly wage gains.
Individual investors are retreating from the housing market, being replaced by first-time buyers. First-timers comprised 33 percent of June sales, their highest share of the market in four years.