The deluge of new listings is quickly ending while sales slowly improve as we forecasted. If inventory starts to decrease, however, buyers will lose some of their current advantage.
(By Raul Elizalde, 7/06)
In April I forecasted a scenario where the number of new property listings in Sarasota would decline towards a long-term trend, finding normality during the Fall, and sales improve gradually until reaching a similar long-term trendline sometime towards the end of 2006.
Indeed, that seems to be exactly what is happening now. As this graph shows, the number of new listings both in the single-family and condo categories is quickly leveling out.
Sales of real estate in Sarasota are improving at a slower pace than listings, as forecasted in April. This chart shows that single-family home sales are likely to reach last Summer’s levels – far from the torrid pace of the Summer of 2004, but still the highest since October 2005. Condo sales, on the other hand, despite a flurry of year-end contracts related to new construction, show very little improvement in the last few months. This condition is likely to improve marginally over the Summer, but a full recovery to the trendline is probably not in the cards this year.
A more encouraging development is the number of properties going under contract. Although not all contracts end up in a closed sale, the fact that single-family homes are now going under contract at virtually the same pace as a year ago is quite encouraging for sellers. Condos, on the other hand, have not seen the same kind of activity, although this data does not include the number of reservations or contracts placed by new projects, which not always go into the MLS.
The implication for sellers is quite encouraging, as competition seems to be leveling out and it might be just a matter of time until it starts to drop. For buyers, on the other hand, this fact confirms our view that the window of opportunity might not remain open much longer.
As long as inventory is plentiful and sellers do not perceive a clear improvement, buyers will remain in control of the negotiation process. But as soon as the market starts to give signals of improvement, sellers will become encouraged to hold firm on their price demands. We continue to believe that the best time to buy is now.
When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise to help you negotiate your real estate transaction, whether you are buying or selling a property. 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.
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.
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