Despite a tightening stock of homes on the market, home sales surged 38% last month in the Sarasota-Manatee, Fla., region.
Local buyers closed on 1,695 existing single-family homes in October, 465 more than one year earlier and 108 ahead of September, according to a report from the Florida Realtors trade group.
Home sales in the two-county region are now 5.0% ahead of year-ago levels, a show of resilience from the real estate market after several months of plunging sales early in the coronavirus pandemic.
“The October numbers help us realize just how crazy our market has been over the past several months,” said David Clapp, president of the Realtor Association of Sarasota and Manatee. “Closed sales are up by 34% among all categories, and this extremely strong market does not appear to be ending anytime soon, as new pending sales are up by a combined 39.5% compared to last year in October.”
Homes are trading at a fast pace as the number of homes for sale continues to shrink. The combined inventory of active listings was down by 35.1% over the year in Sarasota-Manatee.
“As we go into year end, we continue to be challenged with a low supply of inventory,” Clapp said. “The lack of inventory, and highly competitive bidding for existing inventory, has discouraged some buyers from buying now. It is our hope and expectation that supply will increase after the holidays and going into the new year.”
The median sale price for an existing single-family home in the two counites rose 16% over the year to $351,851, topping the record of $340,000 set in July and August.
Looking at third-quarter data, Sarasota County home prices have finally recovered to their pre-Great Recession levels, said Robert Goldman, an agent with Michael Saunders & Co. in Venice.
“It has taken 14 years for home prices to claw their way back,” he said. “To have done so in the grips of the COVID pandemic, is nothing short of amazing.”
Real estate database CoreLogic disagrees, saying Sarasota-Manatee prices as of September remained 7.3% lower than their pre-bubble highs, the 28th largest margin of peak-to-current among the 404 U.S. metro areas it studied.
Condo sales also jumped in the two-county area. The 715 units closed marked a 33% gain over the year, with year-to-date sales now nearly 11% ahead of 2019.
Condos traded for $260,000, up 19.4% in October, and they have now climbed 9.1% for the year.
Pending sales — a good measure of future closings — rose in Sarasota-Manatee for the fifth straight month, with homes up by 38% in Sarasota and by 33% in Manatee.
The inventory of single-family homes remains well below year-ago levels, now with just a 2-month supply in Sarasota and 1.8 months in Manatee. A six-month supply is the traditional level of a balanced market.
The supply of available condos is down to 3.2 months in Sarasota and 2.6 months in Manatee.
With fewer homes on the market, buyers are closing deals more quickly. The median time from listing to contract for single-family homes was 18 days in Manatee and 21 days in Sarasota, both around half as much time as last year, the Realtor Association reported.
Cash buyers are becoming bigger players in the market, with those deals for homes up 54% in Manatee and 17% in Sarasota.
Statewide, buyers closed on 29,659 existing single-family homes last month, 27% ahead of 2019. Condo sales jumped by 30% to 12,110, Florida Realtors reported.
Homes sold for a median $305,000 throughout Florida in October, up 15.6% over the year, while condos traded for 16% more, at $221,000.
“Housing is an essential need, and there is strong demand from buyers despite the ongoing pandemic, and perhaps even sparked by the fact that our homes have become more important than ever this year,” said Barry Grooms, a Bradenton agent who is the current president of Florida Realtors. “But increasing constraints on the inventory of for-sale homes in Florida is making it more and more difficult for buyers, and putting pressure on rising prices, which in turn impacts affordability.”
In Florida, the inventory for single-family existing homes fell to a record low of a 2.1-months’ supply, while condo inventory also hit a record low of 4.9 months.
Persistent demand and shrinking inventory continue to drive up home values, but that is only part of the reason, said Brad O’Connor, chief economist at Florida Realtors.
“A good share of these increases is still being driven by good, old-fashioned price appreciation, especially among single-family starter homes, which are increasingly difficult to find on the market,” he said.
Nationwide, sales of existing homes rose for a fifth straight month in October, the National Association of Realtors reported, reaching a level not seen since before the housing bubble popped 14 years ago.
Existing homes sales rose 4.3% to an seasonally adjusted rate of 6.85 million annualized units, the industry trade group said. Reflecting the searing-hot housing market, that figure is up 26.6% from a year earlier.
The 6.85 million figure is the highest for that data since February 2006 — the eve of when the housing market reached its apex and subsequently collapsed.
Realtors and housing market experts have said, despite the historical comparison, the housing market is in a different and healthier place than it was last time it was at these levels. Interest rates are at near record lows, which subsequently has led to mortgage rates to be at historic lows. Also, the pandemic has caused many families to seek out different living arrangements to reflect that many people are likely to work remotely for the foreseeable future.
But the housing market is now heading into the winter months, and with resurgent cases of coronavirus happening nationwide, it is more likely that the housing market will take a pause in the coming months instead of continue to rocket higher.
“We do expect the pace of sales to slow in the fourth quarter, with a weak recovery, resurgent pandemic and depleted inventories weighing on activity, although the risk may be for further upside surprises,” said Nancy Van Housten, lead U.S. economist for Oxford Economics.
