Timely Information on the Sarasota Real Estate Market

Be Happy the Condo You Own is in Sarasota

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There are worse places within Florida to own a condominium.  As I started this article, I thought that things would look even brighter for Sarasota, but the good news is that the condo market is improving across the entire state. I think it is important that the entire state improve, not only Sarasota. If the market starts to improve (shift more towards the sellers’ advantage) only in our area, then eventually we will stagnate as condo buyers migrate to the areas with the better deals. Consider the chart below derived from TrendGraphix data - Condos only.

The chart shows some of the most popular luxury condominium spots in South Florida. The most important statistic in measuring the health of the market is the current months of supply. This stat describes how long it would take to liquidate the current level of unsold inventory if the unit sales pace of the past 12 months continued. Six months of supply is considered a balanced market. Above six months is a glut or buyers market and below six months is a shortage or sellers market. While solidly in the “buyer’s market” category, the downtown Sarasota market has the lowest months of supply of all the markets shown (ie most favorable to owner/sellers). This is even more remarkable considering that at the beginning of 2009 there was over a 2 year supply of unsold inventory in Downtown Sarasota.

Another important statistic is the amount of distressed property in the current inventory. Most distressed properties are priced at or under the market to generate a quick sale. The more distressed properties in inventory, the more pricing pressure they put on the market.  About 8% of the downtown condo market inventory is comprised of distressed properties (condos listed as either a short sale or bank owned). This is more than the 6% shown in Naples and Longboat Key, but still overall small. County wide, 12% of all condos in inventory are distressed, so the downtown market is one third better than the county average.

The final stat I think important is the relationship between distressed properties as a percentage of inventory compared to sales. The higher the sales percentage compared to inventory tells you how much faster distressed property is absorbed compared to the total inventory. For example, distressed inventory is 8% of the total downtown inventory but 21% of sales. That means that distressed inventory moves nearly 3 times as fast as total inventory. Of the markets shown, only Naples is faster. There is a strong market for condos in downtown Sarasota that are priced well.

With the lowest months of supply and near ties in the distressed property categories, Sarasota looks to be the best market of the group for owner/sellers.