May numbers continue exceptional spring for Sarasota market

The Sarasota real estate market continued its strong showing this spring, with 796 total sales in May reported by members of the Sarasota Association of Realtors. This is the second highest total in the past six years. Only the March 2011 sales figure of 800 has been higher since the end of the real estate boom of 2003-2005.

Prices for both single-family homes and condos also climbed in May 2011, with the condo median sales price of $218,750 at the highest since October 2009. For single-family homes, the figure rose to $159,000 in May, just under the March high of $159,250, continuing the 2011 upward trend.

The total available property inventory dropped to 5,010, another big decrease from last month’s level of 5,258, and once again the lowest level in the past six years. The inventory reached its apex in April 2007, when 17,089 properties were on the market.

The lower inventory, combined with the higher sales rate, has now dropped the months of inventory to 5.8 months for single-family homes and 7.4 months for condos, both figures the lowest since 2005. The six-month level is traditionally a point that represents equilibrium in the market between buyers and sellers. At the point when the market was at its most unbalanced in favor of buyers, in November 2008, the figures were 24 months for single-family homes and an incredible 41.7 months for condos. Once the figure trends downward below six months, buyers are often forced to compete for properties, which generally drives prices higher.

“Clearly, we’ve seen an amazing improvement in our market in the past three years,” said SAR President Michael Bruno. “We have been trending in the right direction for several months now, and we’re starting to witness a return to the point where multiple buyers bid on a particular property. As the inventory of available properties drops, competition increases for the homes for sale, and prices naturally rise. The only thing holding back even greater appreciation appears to be the high percentage of distressed properties.”

Even that statistic is trending in a healthy direction, as the overall percentage of distressed sales (short sales and foreclosure sales) dropped to 38 percent of the May 2011 sales. That compares to 47 percent as recently as February 2011 and a high of 51 percent in November 2010.

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May numbers continue exceptional spring for Sarasota market

As the inventory of available properties drops, competition increases for the homes for sale, and prices naturally rise. The only thing holding back even greater appreciation appears to be the high percentage of distressed properties.



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