Cash sales of single family homes in Sarasota have been on the decline since last year, statistics culled from Florida Realtors show, a trend which also affirms a fast-normalizing local housing market. This sustained decline indicates that an increasing number of the deals closed recently involved buyers of Sarasota homes for sale availing of some forms of financing.
Given the strict measures lenders and monetary authorities have put in place to prevent a repeat of the last housing bust, the trend towards more financed home purchases redounds to a healthy market in the long term, analysts agree. This situation, they also explain, indicates an upward nudge in local household formation, and to some extent, demonstrates the growing competence of local realtors in helping clients navigate through the current maze of mortgage financing.
In May 2015, there were 342 Sarasota cash sales of single family homes, down nearly 15% from a year ago and one of the sharpest drop experienced so far this year. This downswing follows a 10.7% year-over-year drop in April. Previous year, the steepest decline was recorded in October 2014 during which cash sales slipped by 25%.
The 342 May cash transactions represent 43.7% of the total 783closed deals on single family homes sold in Sarasota in May of 2015. This percentage share is down from the 53.8% slice of cash sales in the total number of single family homes sold in Sarasota in May 2014.
This downtrend mirrors cash home sales’ deceleration nationally. According to the real estate research firm CoreLogic, 34.6% of all homes sold in the U.S. in March were paid in cash, down from 39% in the same month in 2014. This decline was the 27th consecutive monthly drop by year-over-year comparison.
Cash sales U.S.-wide hit its peak in January 2011, says CoreLogic, when such deals accounted for 46.5% of total homes sold. Prior to the Great Recession’s housing crisis, that rate was approximately 25%. If the cash home sales downswing continues at the current pace, it should hit the pre-recession mark sometime in mid-2016, the research firm predicts.
Florida remained No. 1 across the country in terms of cash sales, with 51.8% slice of total homes sold in March 2015, according to CoreLogic. During the month, single family homes for sale paid in cash in Sarasota remained significant and accounted for 49.3% of total deals. Nonetheless, this was down by nearly 16% from a year earlier.
On another positive note, analysts take the high cash sales rate in Florida not only as a sign of sustained investor activity. They also see it as an indication that retiring baby boomers from the northern U.S. are cashing out on their residential properties in favor of locating in the Sunshine State.
Many developers of Sarasota homes for sale definitely share this view, and some are, in fact, pursuing projects beyond residential construction in new master developed communities, new condo towers and age 55+ neighborhoods. They are focusing too on a number of infill projects, another clear indication of the normalizing growth in the Sarasota home market.
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