The month of December proved to be another good month for home and condo sales in Sarasota including the barrier islands, Lido, Bird, Siesta and Longboat Key as well as in the neighboring communities of Bradenton and Lakewood Ranch. The number of properties on the market at this point remains tight and as a result of continued demand, prices are rising.
The peak tourist season is just kicking off as our snowbird
friends from the northern U.S. and Canada come into the market. This increase in demand, along with the current tight
supply of homes on the market has driven the median price of condominiums up by
over 20% from the level last year at this time. Similarly, the median price of single-family
homes is 11% above the level at this
same point a year ago. A continuation of such dramatic increases in home prices
coupled with expected higher interest rates could derail the housing recovery
in 2014, but there are factors at work here in Sarasota that will counter that risk.
First, the slight drop-off in sales volumes in the months
of November and December was due, in large part, to the tight supply of homes
available for sale. But, as prices have risen, more homes and
condos are beginning to come on the market.
At the end of November, there were 4,288 properties on the market
compared with 4,032 the prior month.
This uptick in the supply of homes available will help keep the market from
becoming overheated.
Second, the affluent nature of the Sarasota area is such
that modest increases in the mortgage interest rates, if they occur, will not
have as big an impact on Sarasota as it would on other real estate
markets. As in the past, Sarasota waterfront condos and upscale Sarasota golf course homes, in areas like the Lakewood Ranch Country Club and Country Club East developments are frequently sold on an all-cash basis,
Sarasota
Association of Realtors President Roger Piro suggested recently that the strong
attendance Realtors are seeing at open houses, coupled with the traditional
increase in seasonal residents we see at this time suggests, based on past trends, that Sarasota
will continue to experience a busy real estate market in the coming winter and
spring months and probably see continued strength through the rest of 2014.
Lawrence Yun, the chief economist for the National
Association of Realtors has a similarly positive, yet balanced, outlook for 2014. He suggests
that two forces will balance each other out.
Rising interest rates may tend to dampen home sale volumes slightly but,
at the same time, he sees buyers becoming more emboldened to make the buy decision buoyed by both improving job numbers and more lenient mortgage qualification standards. Existing
home sales, he forecasts, will remain at a healthy rate of about 5.1 million units. And, while new housing starts have languished
in 2013, Mr. Yun predicts new housing starts will increase by 18.5% from
430,000 in 2013 to 510,000 in 2014. This
increase in supply will help moderate price increases and offset the effects of slightly higher
interest rates.
In summary, the most likely scenario we see at this point is for the Sarasota real estate market to stabilize in 2014 at a healthy level, not expanding so fast as to create another bubble, but also not depressed by higher mortgage interest rates. We see Sarasota benefitting in 2014 from healthy trends that are occurring both nationally and locally. And unless something foolish is done in Washington to inflict new damage on the economy, 2014 looks to be a good year for the sales of homes for sale in Sarasota Florida and the people lucky enough to live in this wonderful area.
If you would like a more complete understanding of why now is the right time to invest in a Sarasota waterfront home or perhaps a downtown Sarasota condo or a golf course home, please contact me at your convenience. For a more immediate response to your questions, call me on my cellphone at 941-266-1799 today. I'd appreciate the opportunity to be of service to you.
