For the first time, more listings expire than sell. (By Raul Elizalde, 3/06)
Sellers in Sarasota have been pounded by the news: this week, the Commerce Department reported that sales of new single-family homes dropped by 5% last month, bigger than most analysts anticipated. And on March 1st. they had their early morning coffee along with this above-the-fold headline in the local paper: 48% Home Sales Drop Leads State. Is there any hope?
There is no question that the sales have gone down, although comparing today’s activity with last year’s feverish pace might not be a fair comparison. Furthermore, January and February sales have always been slow (May and June are the most active months). I expect sales to pick up in the Spring and over the Summer, although not to the levels of last year.
By far a more important problem facing sellers, in my view, is the explosion in the number of listings. At the end of February there were 3880 single-family homes and 2420 condos for sale, over 4 times the number of units offered for sale a year ago. Although last year’s number was particularly low, the number of properties offered for sale now is still at roughly twice of what it should be.
This combination of oversupply and low demand creates a unique environment where listings are now expiring – i.e. reaching the end of the listing agreement unsold – at an alarming rate. In fact, there are more listings that expire than those which sell (see graph). Although data is only available for a few years back, this is most likely unprecedented, at least since MLS data services were put in place.
The overabundance of listings has created some confusion among prospective buyers, especially those working without an agent. Sorting through the many properties offered for sale is hard enough. But large price differences for similar properties, recurring price reductions, and inexplicable markups on properties that were purchased recently and put up for resale without any added value have created a frightful environment for buyers.
In this environment, serious sellers need to be exceedingly clear in their objectives. Putting up a property to sell at an unrealistic price to see if “someone bites” is now officially a waste of time. Serious sellers must make absolutely sure that their properties:
*Are priced correctly. a good agent will provide comparables and update them regularly. A professional appraisal, which a real estate agent can’t do, is a good idea for properties new on the market.
*Are marketed aggressively. all venues, from online and print advertising to personal contacts, have to be explored. For-sale-by-owners are at a considerable disadvantage in this market.
*Are in their best showing condition at all times. maintaining an excellent curb appeal is essential; sellers (or agents) restricting showing times will lose out to those who can show at a moment’s notice.
There is much to say on each one of these three guidelines, which are essential. They will not guarantee that a property will sell quickly in today’s environment. But not following them virtually guarantees that it will expire unsold.
When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise to understand the value of a property and how to market it right. Our track record, added to the unsurpassed reputation of Michael Saunders & Company as the premier real estate company in Florida’s Gulf Coast, give you the peace of mind you deserve, whether you are looking to buy or sell a property.
Call us today at 941-350-7904 for a consultation, and visit our website, www.SarasotaProperty.info, for monthly updates on the Sarasota real estate market.
