Posted by Scott Norris on Thu, Jun 24, 2010 @ 07:36 AM
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.
Posted by Scott Norris on Sat, Jun 05, 2010 @ 06:43 AM
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.
Posted by Scott Norris on Sun, May 30, 2010 @ 08:18 PM
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.