Sarasota Home Price Gains Seen Moderating


SARASOTA, FLORIDA, November 7th, 2013 – Prospective home sellers may have to take decisive action before year-end as the recent spike in home prices may soon decelerate as a result of improving inventory and higher levels of new builds going into 2014, Sarasota Bay Real Estate reports. The 14.7% year-over-year increase in the national median price that the National Association of Realtors (NAR) reported for August may be the tail-end of the impressive appreciation of home prices in recent months.

Notably, the August pace which brought the median price of existing homes nationwide to $212,000 was the strongest annual gain since October 2005 when a 16.6% clip was recorded. The August price gain likewise marked the 18th consecutive monthly increase on an annual basis and the ninth consecutive monthly double-digit gain, also on a year-over-year comparison.

Sale volumes hit peak

Sales Peak

A frenzied market activity, at the same time, was observed in August with NAR reporting that the total volume of existing-home sales for the month hit its peak level in six-and-a-half years. Sales transactions completed for single family homes, condos, and coops totaled 5.48 million in August, up 1.7% from July and 13.2% above August 2012 sales. The days that sold homes stayed on the market stood at a median of 43 days in August. This was nearly unchanged from July’s 42 days but was at a revved-up pace compared to the 70 days on market a year ago.

Meanwhile, total housing inventory improved by 0.4% this August to 2.25 million existing homes available in the market. This represents a 4.9-month supply at the current sales pace, little changed from the 5-month supply in July. In one industry presentation, however, it was estimated that January-June inventory levels have increased by 24%, with steady improvements expected in the third quarter.

New homes coming in

Indications of the impact of new home builds coming into play in the market can be gleaned from a recent report of the Commerce Department on new construction. The agency reported that for August, U.S. homebuilders started construction on 628,000 single family homes, 7% above July, representing the fastest pace since February. The department also reported that builders applied for 627,000 permits for single family home construction, up 3% from July and stands as the best rate since May 2008.

On the regional and local front, the homebuilding pace appears even more frenetic. In Southwest Florida, it was estimated that new home construction permits rose year-over-year by 53% in January–August to 2,108. In Sarasota and Manatee counties for August alone, 285 permits were registered, up 39% from July and 40% higher than the year-earlier level.

Yet another from Neal

Filing of more home construction permits can be expected. For instance, Neal Communities, a builder based in Lakewood Ranch and one of the most active in the region, has applied for a rezoning of a 52-acre site in Bradenton. Eying higher density, it plans to build a total of 278 residences in this location at Pope Road and John Taylor Road.

The homebuilder broke ground for this new neighborhood, named Eagle Trace, in May this year. Besides single family homes, paired villas will also be constructed in this community located just south of State Road 64 and only a few miles away from Interstate 75.