The October Case-Shiller numbers released last week for October 2011 were down from September in 19 of the 20 covered in the report. Only Phoenix showed an increase (up .3%). Tampa and Miami were down .5% and 1.2%, respectively. The 10 and 20 market national composite indices were down 1.1% and 1.2%.
Since last October of last year, every market is lower except Washington DC and Detroit. The DC market is up 1.3% since last October while Detroit is up 2.5%. I would say that the upswing in Detroit is because the only direction the index can move is up, however, it managed to drop 3.5% from September. If this trend continues, Detroit will be negative on the year. The current index for Detroit is now at 71.0 which means that today's home prices in Detroit are 29% lower than they were on January 1, 2000. After eleven years, home prices are down 29%.
The biggest and only double digit loser for the past year is Atlanta at down 11.7%. Atlanta shares the stage with Detroit in being the only two markets where prices are under January 1, 2000. Atlanta's index is 91, indicating that home prices have declined 9% over the past 11 years. The Tampa and Miami markets are down 6.1% and 4.0% since last October. The 10 and 20 market national composite indices are down 3.0% and 3.4% on the year.
The Standard and Poors Case Shiller indices measure the change in home prices across 20 markets. The indices are computed monthly with a 2 month lag (October indices are released in December). The indices are computed such that prices on January 1, 2000 equal 100. The percentage change between any two points in time can be measured by dividing change in the index by the index in the earlier period. For example, if the index for this month is 110 and the index for this month last year was 100, then home prices have increased 10%, at least as measured by the index. You can read more at Standard And Poors website.
Across ZIP code 34236, 30 condos sold in the month of November 2011. That is 10% (or just 3 more) than the previous November. For the last 12 months, sales have been essentially flat with 308 residences selling compared to 311 in the previous 12 month period.
Although inventory has ticked up slightly in the past 2 months, levels are still very low by historical standards. The number of residences listed for sale in downtown Sarasota is 13% less than the same time last year and only slightly higher than we ended season with this past winter.
Looking at the market price point shows that most of the interest is at the extremes – properties below $300k and above $1 million are both up double digits in the past 12 months compared to prior 12 month period. The near opposite is true of everything in between- in all 3 categories between $300k and $1 million, sales have declined (most by double digits).
The inventory by price point shown in the first 2 columns of the chart above illustrates just how thin things are. Most buyers start with a price range and the ranges are typically tighter that the categories I have charted above. That means the starting point, before talking about view, updates, features, location within downtown, etc., is going to be a very low number.
Results by building
The chart below provides sales and inventory information for some of the more popular buildings in downtown. As you study the chart be carefull about any assumptions regarding the sales per square foot numbers shown. In most cases, there aren’t enough data points (i.e. sale transactions) to conclude anything about the numbers. One thing that is clear from the chart, however, is that the current volume of distressed inventory for sale downtown is virtually nil.
Choppy is what best describes the past year of the Case-Shiller Home Price Indices. Since peaking in August 2006, the 20 market National Composite index declined for 33 months in a row. That’s represents a decline in home prices every month between August 2006 and April 2009. During this period the index declined from a value of 206 to 139 or about 33%. The indices for Tampa and Miami declined about 41% and 48%, respectively, during this same period.
source is S&P Case-Shiller Home Price Indices for September 2011 (released in November 2011)
Since April 2009, the 20 market national composite index has bounced around moving up for 3 or 4 months then down for 3 or 4 months. Currently the national composite index stands 2% higher than April 2009. So the general trend through all of the choppiness over the past 2 and half years has been up. The Florida indices have continued to decline during the past 2 and half years. Since April 2009, Tampa and Miami are down 10% and 5% respectively. However, most of this decline happened early on in the period. For 2011, both Florida indices are down only about 1%.
This choppiness is more or less what you would expect at some turning point in the market. Either they market is taking a breather before going lower or the period of price declines is about to be over. I think the foreclosure story will be the deciding factor here and may be what is contributing to the price fluctuations. Read my post on Distressed Property here to get more details.
Foreclosure inventory continues to decline as does short sale inventory, both at a pace that is more rapid than the decline in overall inventory. At the end of November 2011, distressed inventory (total of bank owned and short sale listings) of homes and condominiums in Sarasota was 17% of total inventory, down from 19% this time last year. For the past 12 months, sales of distressed inventory have been 40% of sales down from 45% over the previous 12 month period.
In Manatee County the numbers are even more pronounced. Distressed inventory is now just 22% of total inventory, down nearly a fourth from the 28% last November. Sales of distressed inventory were 46% of total sales over the past 12 months compared with 48% over the previous 12 month period.
Like most things to do with real estate, foreclosure sales and inventory are not slathered equally across the all areas, as the chart below shows.
Here’s how you read the chart:
-
The % of Co. Distressed represents the % of total county distressed sales and inventory occurring/present in the area. For example, during the past 12 months this year, 13% of all Sarasota County distressed sales occurred in Englewood. And, as of November 30, 2011, 18% of all Sarasota County distressed inventory listed for sale was located in Englewood.
-
The % of area’s total represents the penetration of distressed property sales and inventory to the total of all sales and inventory for the area indicated. Again, looking at Englewood, distressed sales for the past 12 months accounted for 61% of all Englewood sales while distressed inventory listed for sale in Englewood accounts for 22% of all single family homes and condos listed for sale in Englewood (compared to 40% and 17% for all of Sarasota County as shown on the top line).
If you know anything about the area, it will only take seconds to see what’s happening. There is a direct relationship with property values and foreclosure concentration. Sarasota, in general, has more luxury property than Manatee County and overall, a higher average transaction size. Sarasota County also have a lower penetration of distressed sales and inventory. Within Sarasota County, the luxury areas of Longboat, downtown, and Siesta have fewer than half the penetration of distressed sales and inventory as the generally lower priced south county areas.
The same is true within Manatee County as well. Lakewood Ranch and Anna Maria Island have higher prices and fewer relative distressed sales and inventory than the rest of the county.
If the “next wave of foreclosures” is the only thing that can slow the recovery, then you should feel some relief if you own property (or are considering buying property) in one of the luxury areas. At least to date, those areas have been somewhat insulated from the entire foreclosure morass.
Manatee and Sarasota Single Family Home Market
Unless otherwise stated, all data in this article comes from Trendgraphix and the My Florida Regional MLS for the product categories and time periods described.
November was a huge month for single family home sales across both counties. Manatee County Single family home sales increased 9.5% over November 2010 while Sarasota County was up 17% over the same period. For the past 12 months, Manatee County single family home sales are up 8.7% over the previous 12 month period while Sarasota single family home sales are up 3.6% for the same period. Both Counties should easily beat all sales records back to and including the year 2006.
While inventory has ticked up some in the past 2 months, levels are still in the historic low range. We will have fewer homes on the market to start this season than we ended with last season.
Manatee And Sarasota Condomium Market
Unless otherwise stated, all data in this article comes from Trendgraphix and the My Florida Regional MLS for the product categories and time periods described.
The general for trend Manatee and Sarasota condo sales remains positive. From the floor in late 2008, the summer selling seasons (typically the lower volume months) have mostly been higher than previous years as have the peak seasons (winter and early spring months). During last winter season, sales came within just a few sales of reaching boom-time peaks.
While November sales in both counties were 4-5 residences less than the previous November, the past 12 months of sales for both counties is up nicely over the previous 12 month period. Specifically, Manatee County condo sales are up 4% in the past 12 months while Sarasota condo sales are up a healthy 10%.
If anything slows down the condo sales train in Sarasota and Manatee, it will be the lack of condos available for sale. Both counties have around 40% of the inventory on the market than was available for sale when inventory peaked.
That being said, both counties experienced an increase in condos available for sale over the prior month. Unsold Manatee condo inventory closed November with 963 residences, up from 946 listed for sale at the end of October. Similarly, Sarasota County saw unsold condo inventory increase to 1554 residences at the end of November compared to 1507 listed for sale at the end of October. This is largely a seasonal phenomenon as sellers start to place their homes on the market in advance of our annual influx of winter visitors. The same increase happened in November 2010. Even with this increase, Sarasota County inventory levels now are still 15% less than we ended season with last year (9% less in Manatee County).
Manatee and Sarasota Condominiums
Unless othewise stated, all data in this article comes from Trendgraphix and the My Florida Regional MLS for the product categories and time periods described.
The general trend Manatee Condo and Sarasota Condo sales remain positive. From the floor in late 2008 the summer selling seasons (typically the lower volume months) have mostly been higher and peak season (winter and early spring months) have all been higher. During last winter season, sales came within just a few sales of reaching boom-time peaks.
October was mixed with condo sales in Manatee County declining 8% from October 2010 levels while Sarasota County condo sales increased 25% over the previous October.
If anything slows down the condo sales train in Sarasota and Manatee, it wills the lack of condos available for sale. Both counties have around 40% of the inventory on the market than was available for sale when inventory peaked. In fact, the next sales peak we have to climb in Sarasota is back in December 2005, when 260 condos “sold”. I place sold in quotes because many of the sales were from the closing of new buildings that were completed in late 2005 and all sales closed in December. December is historically a weak month for real estate sales. But even so, there are 40% Sarasota condominium residences on the market now than in December 2005.
Manatee and Sarasota Single Family Home Market
Sales of Single family homes in both counties is the same story but to a lesser and more varying degree. In Sarasota, the recovery seems much stronger overall with the slope of the sales line being much steeper since the floor. However, sales in the past 12 months in Manatee County are up 7% compared with just 1% for Sarasota County during the same period. October was a strong month for both counties with Manatee County increasing 10% over October 2010 and Sarasota County up 13%.
As with condos, the lack of homes available for sale could stall single family home sales. The recovery has been predicated on buyers getting the great values on great homes in great locations. As inventory falls, the likelihood of finding that perfect home falls. In a more typical market, this might push prices higher. However, ours is a market of second home buyers (especially condominiums) and second home purchases are 100% discretionary. If the perfect home isn't available at a great price, there may be no urgency to buy.
CoreLogic releases a US Shadow Inventory report at the end of each quarter. The release usually sets off a series of articles on shadow inventory and how the presence of shadow inventory will extend the US housing recovery another couple of years.
Shadow inventory can be simply defined as real estate that is about to be listed for sale. CoreLogic estimates that shadow inventory is about 29% of the total of "visible" plus shadow inventory. As defined by CoreLogic, shadow inventory has 3 components:
-
Properties that have completed the foreclosure process and are now in the hands of the mortgage holder, but not yet listed for sale. They estimate this component to be 390,000 properties nationally or an additional 1.1 month of supply.
-
Properties on which the foreclosure process has started but not completed. They estimate this component to be 430,000 properties nationally or an additional 1.2 month of supply.
-
Mortgaged properties where the borrower is 90 days or more delinquent but for which the foreclosure process has not started. They estimate this component to be 770,000 properties nationally or an additional 2.2 month of supply.
I think that over the past 3 years, about 1 million homes per year have gone through a foreclosure. So, this roughly 1.6 million homes of additional foreclosure inventory is significant. Nationally, it would equate to another year and a half of more foreclosures. But, like the old saying goes, all real estate is local ( or maybe thats politics). Either way, I thought it would be interesting to see what we may have in terms of shadow inventory.
The only statistic that is readily available is the bank inventory of homes that is not listed in MLS (the first bullet point above). Unfortunately, this is also the smalles component. But lets just assume that whatever that number is, that it represents one quarter to the total, roughly the national average (390,000/1,600,000).
According to IMAPP (which gets its data from the local county property appraisers), there are 1,014 residential properties currently owned by banks. Of this, 388 are vacant pieces of land (mostly in south county). That means that there are 626 bank owned condos, single family homes, and other assorted types of residential dwellings owned by banks. According the the MyFloridaRegional MLS, there are 190 such properties listed for sale. That means that banks own 626-190 or 436 residential dwellings that they dont have listed for sale. If this is one quarter of all shadow inventory then Sarasota County has roughly 1744 units of residential shadow inventory.
Given that over 8000 single family homes and condos have sold in the past 12 months, 1700 in shadow inventory doesn't seem that bad. In fact, its only a little over 2 months of additional supply. However, it may well still drag out for 2 more years, simply because the it may take the banks that long to complete all of the foreclosures - but selling it shouldnt be a problem, especially given the current lack of bank owned inventory and the pace at which it historically sells. And also, just as the national shadow inventory is not evenly distributed across the states, Sarasota's shadow inventory is not evently distributed across the county.
More on this next month.
The October Case-Shiller report released the last week of October (August results) shows prices rising from July by .3% in both the 10 and 20 market national composite indices. The indices are still down year over year 3.5% and 3.8% respectively.
The Tampa and Miami markets were down slightly for the month at -.1% and -.3% respectively and leaving them at -5.8% and -4.6% compared to August 2010.
The chart below shows index information by market. Notice that nationally (using the broader 20 market composite index) the price index peaked in July 2006 at just above 206. This implies that prices slightly more than doubled in the six and a half years between January 2000 (when the index was 100) and July 2006. This same index has since given up 30.8% and now sits at 142.8 (or 42.8% above the January 2000 level).
If you look at the market information in the chart above you will see that a couple of markets have really been beaten back since the peak with declines over 55%, namely Phoenix and Las Vegas. Both of these would seem to be somewhat of a surprise as prices weren’t particularly over extended (relative to the national average) yet the current price level came crashing back to the year 2000 or earlier.
Another interesting group is the California markets (LA, San Diego, and San Francisco). All three of these hit peaks higher than the national average (LA and San Diego much higher), yet their current indices are all above the national average (with LA and San Diego being considerably higher). California has a state debt of over 612 billion (StateBudgetSolutions.org ). If California were a country they would be number 12 on the countries with the highest debt levels, somewhere between Mexico and Spain (CIA World Fact Book). They account for some 15% of the $4 trillion in total US state debt. They also have among the highest income tax rates in the country. Their 9.4% personal income tax rate is the highest as is their 8.25% sales tax rate. Their corporate rate of 8.84% is the 6th highest. Every time you pick up the paper some big company is threatening to leave the state. Yet they seemingly have an above average residential real estate market. Go figure.
Finally, look at the turtles in this group – Dallas and Denver. Their home prices never really shot up at all. At their peaks, the indexes for Dallas and Denver were 126 and 140, respectively. Or home prices went up only 26% and 40% over a 6-7 year period. Now they are down only 7.3% and 9.8% from their highs. On average, no matter when you bought or refinanced there, as long as you did so with 10% equity you are still above water. That seems almost foreign.
Total distressed properties (single family homes and condominiums) for all Sarasota County listed in the MFRMLS as of 9/30/11 declined to just 854, the lowest level since peaking at 1993 properties in January 2009. New listings in this same category have edged up slightly in the past 2 months are still represent levels lower than the first quarter of this year. Demand for distressed properties is still high relative to inventory. At the current rate of sales, there is only about a 2 month supply, roughly one third the supply level of non-distressed properties.
Sarasota County Distressed Property
Total Condominiums and Single Family Homes
Find the Sarasota Condominium that is Perfect for You at an Unbelievable Price. Click and View - No Registration Required.
The situation in Manatee County is slightly different. Inventory levels of distressed properties peaked in March 2009 at 1,499 properties. As of the end of September, there were just 755 such properties listed. While still a sizable decrease, levels have once again been increasing in Manatee County. In fact, levels have increased every month since June.
The demand relative to inventory is not as great in Manatee County either. At the current rate of sales, there is a 3 month supply of inventory - roughly twice as much inventory relative to sales as in Sarasota.
Manatee County Distressed Property
Total Condominiums and Single Family Homes
Find the West Bradenton Condominium that's Perfect for you and at a Perfect Price. Just Click and view - No Registration Required.