Sarasota Herald-Tribune 9.27.15
What “normal” means
in a market as active and in-demand as ours has been in recent years is
subject to interpretation. But one could reasonably argue that home
prices in the Sarasota-Manatee market are exactly where they would have
been today had the region’s traditional level of annual property
appreciation been its only influence over the past 15 years.
To put this into
better perspective, it is worth recalling that in January 2001, the
median price for a home in Sarasota County was $155,000 in what was then
considered a “normal” market. Since then, it has risen as high as
$362,000—at the peak of the housing boom—then dipped as low as $120,000
in the aftermath of the Great Recession. However, if you were to
discard the excessive highs and lows and instead applied the region’s
traditional 3 to 4% rate of annual appreciation from 2001 to the
present, today’s median price would be hovering at around $250,000.
Which is almost exactly where it checked in during the month of August.
Based on August home
sales within the Sarasota-Manatee MLS (Multiple Listing Service), the
median price currently stands at $244,000. (Source: Trendgraphix)
Like a “perfect
storm,” the sheer number of buyers who have descended on our region is
the happy result of numerous positive demographic and economic forces
converging all at once to unleash several years of pent-up housing
First came the
investors—both large and small—with deep pockets and designs on our
large inventory of undervalued properties. More recently came the
region’s incredible economic turnaround and its relatively swift return
to full employment. Suddenly, millennials could find new or
better-paying jobs, needed larger quarters for their growing households;
and grew weary of paying escalating rents instead of using today’s
historically low interest rates to begin building wealth.
Baby Boomers—their homes and investment portfolios flush with recovered
equity—could finally sell properties in their home markets; then proceed
to retire or purchase second homes in ours.
Tourism—always a huge
factor in the region’s economic mix—has also been breaking all records
and creating that many more new housing prospects for our market.
Evidently buyers are
comfortable enough with our market’s recent pricing trends to remain
steadfast in their search. This despite the persistent shortage of
properties that has handicapped our market for the better part of three
years. Priced to the market, homes continue to sell with good momentum
and often with multiple offers for their sellers to consider.
Still, the question
on everyone’s mind is where are all the sellers during this moment of
ones—blow over; and this massive wave of buying is bound to moderate.
In spite of our market’s encouraging job growth, economists and seasoned
market watchers believe this will begin happening as soon as early next
year—probably in concert with the Federal Reserve’s long-anticipated
rise in interest rates.
Rising interest rates
could tamp down buyer enthusiasm, especially as home prices rise.
Additionally, with property values on the upswing and the number of
distressed properties at an eight-year low, the investing trend has
likely run its course; with investors at this point more inclined to
sell. This means more options for buyers. And potentially more room
for them to negotiate.
Home sales throughout
the Sunshine State are already beginning to moderate, according to
Florida Realtors; and nationwide they actually declined during the
month of August, with rising prices credited for the slowdown.
In the meantime, the
median price in the Sarasota-Manatee market has reached the point where
healthy levels of annual appreciation would have taken it naturally
absent the boom and bust. That means our region is as close to
normal, sustainable pricing as it has been in nearly 15 years. With
so many buyers resolved to succeed while interest rates are still on
their side, the upcoming season is an especially opportune time to sell.