The Ups and Downs of the 2016 Sarasota Residential Real Estate Market, and What to Watch for in 2017
After a robust 2015, the residential real estate market in Sarasota and Manatee counties gave us a bit of up-and-down in 2016. Home prices were up 8%, property sales were down 4% and the inventory of homes for sale was moving towards a balanced level.
Inventory levels are trending up.
In real estate, a six-month supply of inventory – which means the time it would take to sell all of the homes for sale at the current sales pace – is considered a balanced market, one that favors neither buyers nor sellers. Anything less than a six-month supply is typically a sellers’ market, and more than six months’ is a buyers’ market. Our inventory levels have been on the low side for the last few years, but have been trending up in recent months, closing out the year with 4.7 months’ supply.
The 2016 market statistics show prices holding steady and sales cooling.
With those factors in mind, here’s a look at how 2016 market-wide numbers compared to 2015. The figures below are from the My Florida Regional MLS1 for Sarasota and Manatee counties, all property types, in all price ranges.
Property Sales: 20,687 in 2016 vs. 21,566 in 2015, a decrease of 4.1%
Average Sales Price: $320,774 Dec. 2016 vs. $323,341 Dec. 2015, a decrease of 0.8%
Property Inventory: 7,682 Dec. 2016 vs. 6,840 Dec. 2015, an increase of 12.3%
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Days on the Market: 73 days Dec. 2016 vs. 65 days Dec. 2015, an increase of 12.3%
In the luxury market, higher inventory brought more sales but lower prices.
The 2016 luxury market showed a similar pattern. A larger supply of homes for sale in the $1 million and up price-point caused prices to drop and homes to stay on the market longer, but the number of properties sold went up. Here are the stats2:
Property Sales: 629 in 2016 vs. 596 in 2015, an increase of 5.5%
Average Sales Price: $1,671.472 Dec. 2016 vs. $1,835,980 Dec. 2015, a decrease of 9%
Property Inventory: 986 Dec. 2016 vs. 837 Dec. 2015, an increase of 17.8%
Days on the Market: 148 days Dec. 2016 vs. 142 days Dec. 2015, an increase of 4.2%
Sellers in both the regular and luxury market segments need to be especially savvy about pricing right now. Not only are homes sitting on the market longer, they’re selling for a lower sales-price-to-list-price ratio. The overall market average was 94.4% of asking price, in the luxury market the ratio was 90.8% -- both numbers tell us that sellers are asking more for their homes than buyers are willing to pay.
Mortgage rates, inventory levels and buyer demographics are the areas to watch in 2017.
Whether or not these market trends will continue in 2017 depends on a number of factors, including a few worth watching closely. The first is mortgage rates, which have started to tick up. That could encourage any buyers or sellers who have been on the fence that now is the time to act. And if more potential sellers become motivated to list their homes, that could drive inventory levels up further. Finally, keep an eye on two groups of potential home buyers: Millennial first-time buyers and foreign buyers. Both have slowly been making their move into our housing market, but they have the numbers to really make an impact in the year ahead.
1. Based on statistics for residential single family, condominium and townhouse properties in Sarasota and Manatee counties at all prices as reported by MarketQuest on Jan. 3, 2017, for the period of Jan. 1-Dec. 31, 2016. MarketQuest includes data from My Florida Regional MLS. 2. Based on statistics for residential single family, condominium and townhouse properties in Sarasota and Manatee counties at prices of $1 million and above as reported by MarketQuest on Jan. 3, 2017, for the period of Jan. 1-Dec. 31, 2016. Data is deemed reliable but not guaranteed.
By Jennifer Putnam
Regional Sales Vice President, Southwest Florida
Coldwell Banker Residential Real Estate
This post is contributed by a community member
By Elise Lipoff Ramer (Patch Poster) - February 6, 2017 10:32 am ET