The Market appears to be changing to a NORMAL MARKET
Lately there’s been a lot of talk and media attention to how the market has shifted to a buyer’s market from the seven-year run of a seller’s market. I don’t believe the data indicates that we are truly in a buyer’s market. I believe we are entering in what I would call a Normal Market.
Yes, sales are leveling off and decreasing over the same period of time from last year during the first quarter. And they leveled off the last couple of months of 2018 as well. But a deeper look into the actual numbers indicates that prices are still improving, resales are definitely slower the last year at this time, and the inventory is increasing. However none of these things in my estimation indicate that we’ve completely flipped to a buyer’s market as the media wants everyone to believe. Let’s take a look at the first quarter 2019 sales for Sarasota County.
During the first quarter of 2019 there were 2775 residential sales in Sarasota county. Last year during the first quarter there were a total of 3078 home sales. This is a decrease year-over-year of 9.84%. This is a good indicator we are entering a different market.
The median sold price of all residential sales during the 1st. quarter. was $259,900. In 2018 first quarter sales the median home value was was $254,990. So the median sale price has risen slightly this year by 1.93% over last year’s first quarter. Sure this is not the double digit gains we have seen in previous years but it is still an increase similar to the normal market years prior to the bubble years and the double digit drops during the recession years.
Another important number; the total number of Pending sales this first quarter. In 2019 there were 4408 pendings. in 2018 first quarter there were 4649. So pending sales are down 5.2%
There are some other indicators that show we are in a different market now. Again these data points reflect statistics from normal market years of the past 25-30 years.
The number of active listings during the first quarter of 2019 was 5682 vs. 2018 first quarter when there were 4971 active listings. A big increase of 14.3%. However the supply and demand data show that as of the end of March there was a 6.2 months of supply of homes for sale. If we look at 2015 for example, when we were definitely in a sellers market, there was only a 2.9 month supply. Over the last five years during the month of March the monthly supply average was 4.9% Economists have always said that a 6 month supply is considered a normal market.
Another couple valuable statistics are as follows; The average number of days on the market for all residential sales in the first quarter of 2019 was 80 days on the market. Last year at this same time it was 77 days. And the average percentage drop from original list price to the sold price remained the same yea-over-year at 93.5%. The number of cash transactions is still a healthy 49% of all buyers pay cash for their purchase.
Another factor that does not show up in these sales statistics is new construction sales. Our area is at full tilt withe new construction developments everywhere setting new home record sales. This simply takes resale buyers out of the normal market sales statistics
So yes the times are changing but I don’t believe they are flipping. We are in more of a normal market and not a buyer’s market at this time.
Watch this blog for quarterly updates and we shall see how things develop. See the charts below for more detailed information. Thanks.