Year-End Market Stats

Neutral market, here we come! We love reviewing the statistics and helping you make sense of what is happening in the real estate market locally. We are happy to see an exit of the rollercoaster riding, post-pandemic craziness, inflated ups and downs of the last 2-3 years. When we zoom out and look at Q4 2023 compared to last year and the same quarter 5 years ago, we are starting to see a leveling out of the craziness, a smoothing of the peaks and valleys, and a more peaceful neutral market on the horizon. It is true that Sarasota's price-scape may have simply altered forever, but the run-on-the-bank demand and subsequent rebound of inventory seems to be chilling out. The lap belts have released and we are all being escorted off the roller coaster.

Zoom Out to See the Real Norms and Trends

We have spent the better part of the last year helping everyone get some perspective on the current marketing conditions, namely that the pandemic created a market microcosm that acted different from our regular market. Looking at recent data in a time-limited, short-term bubble does us no favors and gives us some seriously off false stories about what is really happening in our market. So let's zoom out in order to get the true lay of the land.

Inventory and Sales

Sarasota's housing inventory remains a hot topic. From panic-stricken remarks about how we don't have enough on the market to lengthy op-eds about over-development, it can feel like Sarasota simultaneously has too much and too little available home inventory. How can you suss out what is really going on here if you only hear the anecdotes? You have to listen to the numbers, not the stories, to see what is happening.

Let's start with a snapshot of available home inventory in Sarasota in 2022 vs. 2023 and then we'll break down what insights we can glean from this info:

Not the Whole Story: 2022 V. 2023

Knee-jerk reactions if you only look at the short term:

Inventory is the highest it's been in a while
Sales and contracts are pretty low
Why is there so much inventory?! Stop building already!

Zoom Out to Get the Full Picture

Rational reactions when you get the whole story:

Inventory, while climbing in the short-term, is rebounding to pretty much an average place in relation to sales, and here you can see how Q1 2021-Q2 2022 were very clearly an anomaly.
Number of sales is a little down but nothing to be concerned about.
In fact, our available inventory to sales & contracts represents a healthy, neutral market.

The graph below very clearly shows how important it is to zoom out on these statistics in order to get the real story of trends and norms. This is the months of inventory available (months of inventory = number of months it would take to sell the current amount of inventory), a 15-month and a 5-year comparison. The first graph shows inventory "climbing to the level of recent highs," but the second one shows the real story: that in relation to long-term statistics in our area, inventory remains healthy. We had a surge of inventory in the heavy buyer's market at the end of 2018, and a bit of an inventory drought during the depths of the northern flight induced by the pandemic. But overall, our home inventory has balanced out, hovering around 4 months of inventory, which is a nice & healthy place to be.

Average Sale Price

Frankly, we have seen sales prices all over the place over the past year. Recently, we've seen gorgeous places have had to reduce their prices for the first time in ages, and yet some areas are still selling well above historical averages. Prices have changed irrevocably, and we are seeing asking prices in Sarasota now that we have never, ever seen before (tens of millions). With the overall uptick in the pricing structure of our market, volatility like mortgage rates may make less of a difference than it used to, as our market gets flooded with more cash buyers than previously. This can stabilize many other market conditions, even as the price climbs to new heights.

Here's what the stats say:

Short Term Looks Mostly Stable

The quick reactions to this chart tell a completely different story than our paragraph just above the chart, and this is why you cannot trust the short-term data alone. Everything here looks pretty stable. Prices are stable. Asking prices are pretty stable. If you're asking yourself, "Why is this blog saying that prices are higher than ever?" read on.

Long Term Sold Price is Way Up

Rational reactions when we see the full story:

Overall prices are way up over the last 5 years. In fact, the average sold price has more than doubled.
Sellers' price expectations have come down a bit (thank goodness!) from the peak of the pandemic moving panic.
The gap between list and sale price is shrinking again, meaning that everyone can expect a little more stability in the market now than we could just a year or so ago.

Stat Summary

Seasoned Professionals Know the Difference

Someone without years of experience will be operating from a different frame of mind, viewing recent market activity as a slowdown, or even an alarming decline, compared to recent history. Those of us who have been around the market for longer realize that we are still in a very healthy place, as well as have the experience to know how to operate in a more balanced market. We've lived through the recession, recovery, pandemic, boom, and now back to this neutral state. No panic here! Different markets require Real Estate Agents to adjust themselves just like it requires buyers and sellers to adjust their expectations. A balanced market should not scare you and it definitely does not scare us!