Post-Season Market Review

QUICK STATS:

• Inventory is up 79% from 2023
• Sales are up about 6% from 2023
• Available inventory this season is very similar to Season 2019-2020 (pre-COVID norms)
• We are in a seller's market, statistically speaking

BREAKING IT DOWN:

Don't hit the panic button -- it's still a good time and place to be a seller, but as you'll see in the next few graphs, a few data points are not aligning quite like normal. We'll discuss that more in a minute. But as for inventory and sales, we are seeing a return to historical norms, relatively speaking. With less than 4 months of current inventory based on the number of closed sales (months of inventory is how long it would take for the entire inventory of available homes to turn over), we are still solidly in a seller's market, though after the craziness of the COVID and immediately post-COVID years, it sure doesn't feel like your typical seller's market. After years of historically low inventory, buyers are now enjoying a wider range of options, and with mortgages getting easier to obtain* after a few years of the reins being tightly held in that arena, buyers may feel better than they have in a long time about the purchasing landscape in Sarasota.

LISTING & SALES PRICES: SELLERS HAVE GOTTEN MORE REALISTIC

QUICK STATS:

• Average list price has declined about 15% from 2023
• Average sale price, however, has climbed about 26%
• Average sales price for Sarasota homes has been been steadily if shakily climbing for the last 5 years

BREAKING IT DOWN:

When we see the gap between the red and green lines decrease in this graph, what we see is a meeting of the minds between buyers and sellers, steps closer to agreement on home value. It is completely normal that sellers value their investment higher than buyers want to pay; that is just the nature of the market. But what is notable is how out of reach sellers' expectations had gotten during the craziest part of the boom. At its peak, the average list price was more than 3 times the average sales price. Now, we see these numbers at a much more reasonable relationship to each other. This is beneficial to all involved parties, as it means that sellers are generally more reasonable with their price expectations as buyers have more options should they not be able to come to an agreement. This relationship is a pretty good indicator of a neutral market, even though inventory numbers indicate a seller's market as we mentioned above.

AVERAGE PRICE PER SQUARE FOOT: STILL BOOMING

QUICK STATS:

• The average price per square foot is up 23% from 2023...
• ...and up 86% from 2019
• No evidence of prices coming back down anytime soon

BREAKING IT DOWN:

This one is pretty simple: the price per square foot on a residence in Sarasota is only climbing, climbing, climbing. Yes, there are dips here and there on a month-to-month basis, but since 2019, this stat has basically doubled, meaning you are paying twice as much now for the same square footage you would have gotten 5 years ago. The inflation rate does play a role here (which is hovering at 3.5% now, but has been as high as 8% in recent years) but the steep increase in value cannot be construed as only being inflation-related in any way, shape, or form. Prices have gone up, and it looks as though that increase is here to stay.

BIGGEST TAKEAWAY: NEUTRAL SELLERS MARKET

• INVENTORY is strong. This may feel good for buyers, but the numbers indicate we are still in a seller's market. Advantage: Sellers.
• LISTING PRICES are going down, and due to the absolutely absurd run-on-the-bank market we had for a while there, buyers feel great about this. But this is kind of like finding a bottle of Dasani in the middle of the desert; it looks good and it tastes good, but it's not enough to be what you really need, as sales prices are still ticking up. Advantage: Sellers.
• PRICE PER SQUARE FOOT just keeps going up. Advantage: Sellers.

Buyers can take heart in the fact that the market is not as seller-friendly as it was 2 years ago, but should not be under an illusion that they hold the cards. This is just the market buying you flowers after it started a fight with you for no reason when you were just trying to survive COVID-19. It hasn't really changed, it's just trying to butter you up.

Sellers on the other hand need to settle in the this slightly-more-normal reality. You may not receive multiple offers. You may have to have your home listed for 2-3 months before getting an offer. You may have to fix broken stuff before you leave. But even with that, you are better poised for selling - and selling high - than you ever have been before.

*Our favorite lender David Freed from Blue Skye Lending helped us out with some insight into the current mortgage landscape. You can find that information in our next blog!