Home Marketing Tips Plus Timely Information on Factors Affecting the Sarasota and Manatee County Real Estate Market

S&P/Case-Shiller Home Price Indicies Positive for Second Month in a Row

The May 2010 Case-Shiller Home Price Indicies for May were reported on Tuesday. All 20 markets tracked reported an increase over the prior month with the exception of Las Vegas where the index decreased by .5%.

Both Florida markets (Tampa and Miami) tracked by the company showed increases of .9% over April. The big winners were Minneapolis (up 2.8%) and Atlanta (up 2.0%). The 20 market national composite index was up 1.3%

For the year, the Tampa market is down .4% while Miami is down 1.6%. The 20 market composite index is up .4%

Case Shiller Shows Some Signs of Life Sarasota Real Estate Prices

The Standard and Poors Case Shiller Home Price Indicies are one of the most authoritative and widely quoted measures of changes in home prices. You can read about the index and how it is constructed at the Standard and Poors Site. There is a 3 month lag in reporting of the index. The figures release in July 2010 are for results in April 2010.

 

The Case Shiller Home Price Indices for most markets measured increased during April. The Miami market was one of two exceptions (NY City being the other), dropping -.8%. Tampa increased .5%  while the 20 market national composite was up .8%

Big Gainers

This month's price leaders were Washington DC (+2.4%), San Francisco (+2.2%),  Dallas (+2.2%), Minneapolis (+1.8%), and Portland OR (+1.8%).

Year-to-Date

Since the beginning of 2010, the Miami index has dropped 2.4%. The Tampa index has declined 1.3%. The 20 market composite index is down just .8%.

San Diego (up 3.3%) and San Francisco (up 2.5%) are the 2 stongest markets this year.

The worst markets this year are still the midwest, with Chicago down 5.8%, Detroit down  6.5% , and Minneapolis down 3.8%. The one exception in the Mid West is Cleveland (up .9%). A bad Mid Western market is not good for Sarasota and Bradenton real estate prices because the Mid Western states are huge feeder markets for us.

Lonboat Key Real Estate - Condominium Market Update

Longboat Key Condominium Market Summary

Longboat Key Condominiums - Distress Property Summary

Recap

Unsold inventory levels are essentially flat with the same month last year but unit sales over the past 12 months are up 68%. That cut the the months of supply 32.6 months this time last year to just 19.2 months this year. Inventory is still high compared to sales (6 months would be a stable market) but we are moving rapidly in the right direction. A 2/3 increase in sales is more than most people would have expected this time last year.

The number of Longboat condominiums added to the market in the last 12 months is also about the same as last year. Additionally, distressed property inventory and sales are so small, they are playing no role in the market. So supply is not getting out of hand.

Although not readily apparent from the chart, one of the largest factors contributing to the decreasing months of supply figure is sellers taking their condos off the market. If we started the last 12 month period with 445 residences on the market, sold 275, and added 518 new listings, then inventory should have increased 243 residences to 688. But unsold inventory at the end of the period was only 441, which implies that 247 sellers took their condo off the market (presumably because they couldn't sell it for the price they wanted).

Some analyst look at this and call it overhang. These 247 sellers are waiting for any upward movement in prices. As soon as prices start to move up, so the logic goes, this group will sell, keeping prices low. I'm not so sure. For one thing, there are always people willing to sell if the price gets high enough. Secondly, as prices start to rise, people suddenly start to feel better about owing their property. The fear of missing out on the second big boom of our lifetime can be stronger than the fear of larger losses, especially if, like most longboat Key real estate holders, you can absorb the losses.

Longboat Key Real Estate Market Update - Single Family Homes

Longboat Key Market Summary

Distressed Property Summary

 

Recap

Inventory levels of Longboat Key homes are down 9% over the same month last year (end of May) while sales units for the 12 months ended May 2010 are up 16% over the same 12 months in the previous year. Listings added to the market also declined (6%) during the 12 months ended in May 2010 compared to the the previous 12 month period. All of these are very positive signs that the market is tightening.

On the negative side, we still have 21 months of inventory on hand based on the past 12 months of sales. In other words, if we continue to sell at a pace of 91 homes per year, it would take 21 months to liquidate the 157 homes we have in inventory. While 21 months is an improvement over our position last year (which was 26 months), it is still very high and means that buyers will, in general,  continue to have the upper hand in negotiations. 

Also alarming is the average length of time on market for sold listings. This statistic has increased  40 days since last year. I believe that this is a function of sellers holding out longer on price than any fall off in demand (as evidenced by the increase in unit sales).

Finally, the median sales price and price per square foot stats are falling. These changes are minor and difficult to interpret. I could mean that prices are falling or it could mean that buyers are just focusing on lower priced homes.

Another huge positive for all of  Longboat Key real estate is the insignificant role that distressed property (foreclosures and short sales) play in the market. Across all Sarasota real estate, distressed property sales make up about 45% of the sales. On Longboat Key, distressed property sales are just 11% of all sales over the past 12 months and distressed inventory levels are just 8% of total inventory. 

 

Sarasota Real Estate Market is Tightening

Here's some news from ground regarding the state of the Manatee and Sarasota real estate market. This week, in 2 separate and unrelated transactions, I had buyers involved in multiple offer situations. In other words, my buyers were actually competing for a property with another buyer. This happened not once but twice during this past week.

The fact that I wrote two offers in a week is rare enough. That both had to raise their offers to stay in the game is amazing. I've mentioned this in most of my last few market update posts, but I'll say it again - I don't care what you hear about the next wave of foreclosures, shadow inventory not yet on the market, or even high unemployment. As long as inventory available for sale on any given day is actually less than the previous day, things are getting better.

It may be true that a large number of foreclosed homes will come on the market later the year. But if we continue to digest foreclosed inventory at the same pace as last year, I don't think the lenders could foreclose fast enough to swamp the market.

 Consider this chart. The data comes from the My Florida Regional MLS for all of Sarasota County (all property types) for the periods indicated

	Bank Owned Property	Non-Distressed Property
Unit Sales Jan-May 2010	304	2604
Unit Inventory EOM May	298	5375
Absorption Rate	56 Days	314 Days
Median Days to Contract	18	80
Median Days to Close	57	120

 At the current rate of sales, it would only take 56 days to eliminate all bank-owned inventory from the market. 

Why do Agents Run Newspaper Ads

Interestingly enough, the NAR Study asked home sellers what methods agent used to market their home.  Print advertising was the 4th most common approach with 42% of home sellers saying that agents used newspaper advertising in their marketing plan. More interesting is that 37% used print advertising in a home magazine (which is rounded completely of the sources used by buyers). Why would agents spend this money and wouldn't it better be deployed towards internet advertising?

If you look at the ads you will eventually see that there are 2 reasons.  The type of ad will tell you the reason. Large color ads with many featured homes are run to advertise the broker/agent. There is usually very little info about any one home in the ad and nothing in the ad would cause a buyer to call on a home. The ads are designed to entice prospects to call the broker. These ads establish credibility of the broker/agent.  There is just nothing wrong or deceptive about this. Being in a broker ad certainly doesn't hurt your chances of selling and it helps the broker. It's a win/win.

The second type of ad is a stand alone "house ad". These are either run to satisfy a seller who doesn't believe the statistics I just presented or by an agent who doesn't know about the stats. Either way, you can see that the ads don't scream for anyone to call and they are totally ineffective, under most circumstances. This is a lose/lose ad. There is almost no chance that anyone will call the agent which means that the ad did nothing for the seller. Both would have been better off with more internet advertising.

A great home with an unbelievable price can generate some traffic, but ad, price and home must be exceptional. That is rarely the case with most newspaper ads.

Downtown Sarasota Condo Market Update

Sources for this article are Trendgraphix and the Mid Florida Regional MLS (MFR MLS) for the periods indicated. Where current inventory figures or year to date sales are sited, all figures are through or as of May 27, 2010.

 

At the end of April 2010, there were 363 unsold condominiums in downtown Sarasota (zip code 34236) which represents a 30% decrease from the levels on hand in April of 2009. Inventory levels have been chopping around 400 units since August 2009. Sales this season were fairly strong compared to last year. Through April of 2010 118 downtown condos sold compared to only 75 in the same period last year or a 57% increase. Pending sales (sales under contract but not yet closed) were at an 18 month high of 55 residences at the end of April. These pending sales should push May and June sales well above last years levels.

Short sales and bank owned sales were a much smaller factor in downtown condo sales than single family sales across the county. Short sales and bank owned sales only accounted for 18% of downtown condo sales year to date. Across the county, short sales and bank owned sales represent over 45% of total sales. These special situations are also less than 10% of current inventory.

All things considered, it is hard to wish for a rosier picture. Inventory is down 30%, unit volume is up 50% and we have a record number of sales pending to carry us for the next couple of months. Prices have got to stablize if this trend continues for long.

 

 

 

March Case Shiller Numbers Release Tuesday Mostly Negative

The Standard and Poors Case-Shiller Home Price Indices for March were released on Tuesday. The index for the Tampa market dropped .1% for the month, Miami was down .9% and the 10 market national composite index dropped .4%.

Once again the Mid-West markets led to the downside with Chicago being down 2.3%, Detroit down 4.1% (Detroit home prices are now 33% lower than they were on January 1, 2000), Minneapolis down 2.7%. The only anomaly was Cleveland which actually saw home prices increase 1.8% during the month.

All of the gainers were in the west or south west (except for the aforementioned Cleveland) - San Diego was up 1.5%, San Francisco up 1.5%, Denver up .6%, Dallas up .4%, and Seattle up .1%.

 

Lakewood Ranch Real Estate Market Update

Sources for this article are Trendgraphix and the Mid Florida Regional MLS (MFR MLS) for the periods indicated. Where current inventory figures or year to date sales are sited, all figures are through or as of May 22, 2010.

Unit sales of single family homes for the month of April 2010 in zip code 34202 (which includes all of Lakewood Ranch) totaled 39 residences, the same sales volume as April 2009. However, by month end April 2010 the inventory of unsold single family homes was 291 compared to 420 at the end of April 2009. A 30% drop in inventory while holding on to the same level of sales is a very positive sign for the housing market.

Another positive sign is the growth in pending sales (homes under contract but not yet closed). As of the end of April, 80 listings were in pending status. Last month's figure of 61 had been the 15 month high but this month bested those results by nearly 25%.

The Lake Club

There are 11 homes currently listed for sale in the Lake Club. Two of the active listings are short sales. There are no bank-owned properties among the active listings. The listing prices range from $929,000 to $2,860,000. The median list price per square foot of air conditioned space is $306. No new homes were completed in the Lake Club during 2009 and none have been completed so far this year, although there have been some starts.

There have been 5 sales so far this year in the Lake Club. Sale prices have ranged from $750,000 to $2,650,000 or between $182 and $407 per square foot. Two of these sales were short sales (none were bank-owned sales). The two short sales were 2 of the lowest priced sales at $750,000 and $1,225,000.

The Lakewood Ranch Country Club

There are 97 homes currently listed for sale in the Country Club Section of Lakewood Ranch. Of these 18 are listed as short sales and 2 are bank-owned. The listing prices range from $223,500 to $3,799,000. Sixteen homes are listed for over $1,000,000. The median list price is $575,000 or $196 per square foot of air conditioned space. The median listing price for the 18 short sales is $175 per square foot. The two bank-owned listings are listed at $146 and $175 per square foot.

So far this year 56 single family homes have sold. During the same period last year, 51 homes sold. This year 10 of the sales were short sales and 2 were bank owned listings. Comparable figures are not available for last year. For this year, the median sales price has been $522,500 or $184 per square foot of air conditioned space. The 10 short sales sold for a median price per square foot of $170 while the median sale price for the 2 bank-owned sales was $144 square foot.

There are a number of signs that the Lakewood Ranch Real Estate Market is improving, but the best news is the steady decrease in inventory levels. Regardless of what you read about foreclosures and short sales affecting the market or what you think the high levels of unemployment will have on the market (put me in this camp), low inventory levels are the acid test. In my mind, high foreclosures and high levels of unemployment should be affecting the market (ie lowering prices) by causing inventory to increase. If inventory continues to decrease, then these highly publicized problems aren't really that big of a factor in our housing market.

Marketing a Home in the 21st Century (part1)

 Buy now, I have hopefully demonstrated that home marketing today is all about the internet. In truth, the internet is just the medium that has allowed a broader form of marketing to take root - the notion of inbound marketing.

The best way to define inbound marketing is to define it's opposite - outbound marketing, also known as interruption based marketing. Outbound marketing includes avenues like direct mail, TV/radio advertising, newspaper, telemarketing, and more recently email. Your first clue that outbound marketing is dead should be the huge industry that has arisen to "protect" us from receiving the messages of outbound marketers. We now have Tivo that filters TV ads, Sirious subscriber-paid radio that eliminates most radio ads, do-not-call lists and caller id keep telemarketers off of us, and spam filters galore to keep email manageable. You can also read specific newspaper and magazine articles online and bypass all these ads.

Outbound marketing today costs a fortune and is ineffective because people go out of their way to avoid it. And when you do reach someone, they resent the fact that you found them.

Inbound marketing is based on the idea that people like to feel empowered. They like to shop and buy, not be sold to. They want to do their own research and seek advice when necessary, and then only of people they trust. The internet is what has finally given the consumer this power and has given rise to inbound marketing.

It really isn't much of change. In any marketing, you try to get your message in front of your target customer. The only caveat is now get it front of your target audience in a place where they want to see it. Yes, your customers still watch TV, still listen to radio, still read newspapers, own phones, and have email accounts, but they are going to take extraordinary measures to make sure your message doesn't get through. So why bother. Put it where they will look for it - where they want to find it.

The trouble with approach when it comes to selling real estate is that it is very passive compared to say, the 1990's approach to home marketing. Sellers that haven't sold a home in a while usually think that their agent isn't doing anything because today's marketing techniques are not "in your face" like the 1990's and earlier.

 To see what your agent has done, you have to go looking for it, much like a buyer would. You aren't going to be able to pick up the newspaper every week and see an ad for your home. There won't be an open house at your home every weekend, if ever. Instead, you are going to have to rely on stats - things like page views, clicks, emails sent, emails opened, etc as proof that the marketing strategy is working.