2010 Manatee and Sarasota Real Estate Market Recap
Sales and Inventory
Unit sales in both counties were very strong. More single family homes sold in Sarasota and Manatee Counties during 2010 than in any year since 2005 and 2006, respectively. Condo sales were even stronger – you have to go all the way back to 2005 to find a year when more condos were sold in either county. Keep in mind that for both condos and single family homes, new construction was huge during 2005 and 2006. Closings during those years included large numbers of new homes. If not for the new construction sales, 2010 could well have been larger than 2005 in both categories. There were and continue to be home buyers in the market.
To continue this good news, the inventory of unsold homes and condominiums is back to 2005 levels as well. While inventory reduction in condos and single family homes in both counties has slowed (or flat-lined even), the levels are still low by comparison to levels when inventory was at its peak in 2007. In fact, as the chart below shows, inventory is down over half in total from the peak with the largest percentage reduction being in Manatee County where single family inventory is down 65% from the peak and condo inventory down 56% (Sarasota inventory is down 53% and 43% respectively).
However, even though sales are up and inventory is down, there is still an overabundance of unsold inventory on the market relative to sales. Across both counties there is over an 8 month of supply of single family homes and more than 12 months of condo inventory. A stable market is considered 6 months with anything higher being considered a buyer’s market.
The trouble in looking at the county wide statistics is that few people will accept a home or condo anywhere in the county. Most people have specific areas of interest. When you look at the situation by area within the counties, especially in the more popular areas, the numbers don’t look as strong. The reason for this is that buyers have been snapping up properties in the lower valued areas of both counties at rock bottom prices. Generally, these areas are also higher in bank-owned properties (i.e. have a higher foreclosure rate).
In Sarasota County, the fastest selling areas are South County, Englewood and North Port specifically. In Manatee, the fast selling areas are in the northern part of the county.
Foreclosures and Short Sales – the impact of distressed properties
In total, foreclosures (bank owned properties) and short sales combine made up 51% of Sarasota single family home sales and 28% of Sarasota condo sales. With distressed properties comprising this much of the market, it’s hard to say that they are not having an impact. However, as the old saying goes, all real estate is local. If you look at the Downtown Sarasota condo market, for example, distressed property sales were only 21% of the total market. In the West of the Trail single family home market, distressed sales only made up 23% of total sales. These are well below the county averages for condo and single family foreclosure penetration rates of 51% and 28%, respectively.
Still, there is enough volume to affect pricing. The owners of foreclosed properties are more concerned about the speed at which the home sells than price, it seems. The average bank owned listing is only on the market for 60 days before going to contract compared to 166 days for properties that are not distressed. The only thing accelerating the sales process is a low asking price.
Bank owned listing sell so fast that there are seldom an abundance of them on the market. You can see from the chart, that the inventory of foreclosed homes is very minimal. It’s not that we are coming to the end but rather that everything that comes on the market sells very quickly. The result is that the inventory of unsold homes is comprised mostly of non-distressed properties and short sales, while the comparable sales are mostly foreclosures. In many areas, this creates a great ditch between the most recent sales prices (largely bank owned) and the current inventory of homes, priced much higher (because few are bank owned).