If you follow the national news headlines, there is a lot of gloom and doom out there about the future of the real estate market. But the long held wisdom has always said that it’s about “location, location, location”. That is an obvious truth today when looking at the statistics. Some markets in the US have been experiencing significant price reductions, notably San Francisco, LA, Phoenix, Las Vegas, Austin TX, and some mountain state areas. Lets dig in to the stats for the Sarasota County single family statistics for January 2023.
Sales Price Trend in January 2023
The median sale price of Sarasota County single family homes was down 1.0% in January 2023 compared to January 2022. Pricing has held pretty steady considering the rise in mortgage rates since the Fed began raising interest rates in the last year. Interest rates will likely not retreat as the Fed could continue to be aggressive in tackling inflation. Many of the buyers moving to the Sarasota area continue to pay cash as they have sold properties in other states.
Inventory Continues to Grow
Lack of inventory has been a big problem for the last several years and that has been driving up prices. In January the active inventory of Sarasota County homes for sale has increased to 1787 which is about a 2.8 month supply based on current sales. A healthy market generally has a 4 to 6 month supply of listings.
Pending Sales Down 17%
As you can see from the chart the number of pending sales is down by 17%. The data reflected in the January stats includes homes that went under contract in December and January. I expect the number of pending sales to increase as we enter the most active sales months of February, March, and April.
What Will The Trend Be Going Forward?
I follow Sarasota real estate on a daily basis and receive updates on listings, sales, and pricing changes in a large number of communities. I believe that Covid affected the Sarasota real estate market to a great extent causing an influx of new buyers from northern states able to work remotely and escape lockdowns. This caused the unprecedented runup in prices, and Sellers got too greedy and started to list their properties for inflated prices. Now I am seeing a large number of price reductions and this is a good thing. We need to get back to a more normal market!
Let me know your thoughts and please leave me a comment or reach out for more info!