Is our real estate market changing from a seller’s market to a buyer’s market?
In 2018 sales and prices were up slightly for the year compared to 2017. In Sarasota County there were 12,561 home sales for the year compared to 12,100 sales in 2017. That is a 3.81% gain. The median sales price for all homes sold in the county this year was $257,500. That is only a 3% gain year-over-year from 2017 when it was $250,000.
These gains are obviously on the plus side of the ledger as we have seen for the last seven years. However, the gains both in total units sold and in median sales price were less than half of what we have seen each year since 2012.
Earlier this year, in the first six to eight months, prices and units sold were approaching double-digit games over the same period last year. However the last quarter there has been a pronounced shift. The number of units sold for the fourth quarter 2018 was down 5.35% from the same quarter last year. There were 2,603 sales in the fourth quarter of 2018 vs. 2,750 sales in the same quarter of 2017.The median sold price was also down in this last quarter at $255,000 vs. $264,100 in the fourth quarter of 2017. This is a 3.45% loss.
Now, in December 2018, there was a very dramatic drop in units sold. The total number of units sold in December was 772 countywide. This is a 21.7% decrease from December 2017 when there were 986 total units sold.
The median sold price for December 2018 was also down significantly; $250,000 vs. $265,000 in December 2017.This reflects a 5.66% drop in the median sales price from December 2017.
Interestingly, this large drop in the December sales and the median sales price was also noted statewide prompting many forecasters to announce that we are now entering a buyer’s market. For me, I don’t think one month makes a trend but there is strong supporting evidence that things are about to change.
The number of active listings in Sarasota County has steadily increased over the last 5 months. In December this year there were 5,115 active listings. In December of 2017 there were only 4,421 active listings. This is a 15.7% increase in active listings. Pair that with the slower number of sales over a couple of quarters then we probably are in a new market. The question is; Is that a balanced market or maybe a buyer’s market?
Also, pending sales are a good indicator of market trends. This year in December there were 1,113 properties that were pending sale. This is a decrease of 11.1% from December 2017. This translates into reduced future sales.
I believe that from all of the statistics quoted above that the evidence is mounting for a shift in the market at this time. Sales are cooling off and prices are leveling out.
I don’t think we will see the double-digit price gains and double-digit closed sales this coming year that we have been accustomed to over the last six years. Prices will probably increase very gradually, probably about the same percentage as inflation. Sales should remain strong but here again, we are probably not going to see big increases in sales that have witnessed over the last few years.
People are still moving to Florida in record numbers. The economy is healthy and strong and unemployment is at all-time lows. However a median sales price of $257,500 in our market is simply out of reach for a lot of buyers. Maybe value has left the resale market.
Also, new construction is very strong and a huge consideration for buyers when they are considering purchasing a home. I am sure many buyers ask themselves the question; Why would I pay $257,500 for 30-year old home when I can get a brand new home for about the same price?
Watch this blog for quarterly updates and we shall see how things are developing Thanks.
For more detailed information see the sales charts below. (Click on each image for detailed and printable version)