For our clients, John and I strongly believe “knowledge is power”. So that being said, big things are happening in the Sarasota real estate market, and our mission is to arm our buyer clients with as much power as possible to make informed and successful negotiating decisions.
In 2012, did you know Sarasota had the fourth highest sales year in history? Sales for the first two months of 2013 are already topping last year’s monthly levels by 23 percent! At this pace, the Sarasota real estate market could see yet another historic sales year.
So, in other words, …Absolutely forget what you have heard anywhere else in the world about the real estate market being slow. Not here, Not now.
Sometimes, (well…often times if the buyers are from outside of Florida), a new-to-the-market buyer has a very different perception of the Sarasota market conditions. They believe the sellers are “hurting to sell” and their initial strategy might sound something like this, “…whatever they are asking, take 30% off of it for my offer”.
SURVEY SAYS>>>>>>> X (Remember Family Feud?)
That is far from being accurate and a terrible strategy for many reasons. Without the right data, a lot of the buyer’s time could be wasted making offers that don’t even get considered or countered. Worse yet, many times there are multiple offers for the Seller to consider, so the buyer who “lowballs” may never even get a chance to make another offer. Also, some sellers are bargain priced already, so this strategy would epically fail for these bargain-priced properties. That would be a real shame.
Define “lowball offer”
I don’t define a lowball offer by the dollar amount the buyer wants to slash off the list price. I determine a lowball offer based on the amount the buyer wants to slash off the true market value.
Example) I had a past deal where I represented the Buyer and based on my recommendation, my Buyer offered $600,000 below the list price of a home. Now, even though I recommend a buyer does not lowball per se in a hot market, based on my thorough analysis, I still came to the conclusion my client should offer 600k less. The buyer was willing to offer more than I was recommending, but took my advice.
Now, the Seller and listing agent told us to basically “pound sand” based on my client’s offer. However, armed with the right data, I responded by asking the listing agent to tell me what the market time was for a home in that area in that price range. According to my figures which I presented to them, it was over 5 years. After reconsidering the offer with the appropriate data, they responded back within 24 hours that they would take the deal. The data we uncovered was our ally. Even if the data was found not to be our ally, it is important to know what the true situation is, and respond accordingly. Not all offers significantly below list price are lowball offers. It all depends on our in-depth market analysis.
Current February 2013 Sarasota Market Statistics
The Sarasota real estate market saw sales leap by 24 percent in February 2013, compared to February 2012. This follows January’s 22 percent increase, and if the rest of the year continues to reflect 20 percent monthly sales increases, 2013 could be one for the record books.
Members of the Sarasota Association of Realtors® sold 733 properties in February, compared to only 591 sales last February, and 626 closings last month. The breakdown was 504 single family homes and 229 condominiums. That compared to 414 single family homes and 177 condos sold in February 2012. In 2012, sales increased markedly in February, March and April, climbing to 886 closed transactions in April before moderating in the summer months.
Sarasota Pending Real Estate Sales
Pending sales, which predict future closings, were at 1,138 in February, up from January’s total of 1,047. The figure was the highest since March 2011, almost two years ago. The statistic represents properties that went under contract during the month, and indicates sales in March and beyond could also be at high levels.
Sarasota Available Housing Inventory
The available inventory remained near the lowest level in a decade, declining to 3,790 from the January 2013 total of 3,846 properties on the market. The figure is 17.4 percent lower than in February 2012.
The median sale prices for single family homes rose slightly in February to $184,500 from the January figure of $183,800. Last year at this time, the median was $167,500, reflecting a 10.2 percent increase this year. Condo median sale prices recovered to $173,000 in February 2013 after dropping markedly in January 2013 to $130,000. Last February the figure was $150,000, for a 15.3 percent year-to-year increase.
The February 2013 months of inventory were 5.0 months for single family and 5.6 months for condos, lower than the January 2013 figures of 5.4 months and 8.4 months, respectively. The February increase in sales in relation to the smaller inventory resulted in the lower months of inventory numbers. Months of inventory represents the time it would take to deplete the current inventory at the current sales rate. Last February, there were 7.2 months of inventory for single family homes and 9.1 months of inventory for condos. At the worst point of our market in November 2008, there were 24 months of inventory for single family homes and 41.7 months for condos.
Sarasota Distressed Properties
Sales of distressed properties represented only 27.5 percent of the overall sales in February 2013, down significantly from January’s figure of 35.4 percent, and far below the 51 percent figure experienced in the fourth quarter of 2010. The sales price differential between distressed and normal arm’s length sales continues to be high. Locally, the median sale price for a single family foreclosure sale was $96,000 in February, while the median for arm’s length sales was $220,000. Nationally, the price gap has narrowed to only 12 percent, according to Business Insider Magazine in an article headlined “Those Amazing Deals on Foreclosed Homes Are Disappearing.”
Currently, only 427 properties listed for sale in the MLS are short sales or foreclosures, down 43 from last month’s figure. This represents about 11.3 percent of available properties, down from last month’s figure of 12.2 percent and a big drop from January 2012 when the figure represented 17 percent of the market.
In February 2013, statistics continue to reflect a vibrant Sarasota real estate sales market, with many seasonal visitors and local residents purchasing homes or investment properties. If you are looking to buy your piece of paradise, give us a call, we will learn about your goals, and will deliver more than you expect!