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Lonboat Key Real Estate - Condominium Market Update

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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.