Pending sales spiked by 10 percent in October 2010 in the Sarasota real estate market, signaling more closings in future months as the season begins in southwest Florida. There were 819 total pending sales reported last month, compared to 744 in September 2010 and 839 in October 2009. Pending sales reflect future closing activity and they are now trending upward.
Overall sales dropped by 11 percent in October 2010 compared to last month, and 15 percent from last year at this time. The drop is likely attributable to a slowdown in foreclosures prompted by lender concerns over faulty paperwork. Looking at the most recent four months, there has been a fairly steady trend in sales and prices, indicating a stabilizing of the market following more fluctuations earlier in the year.
Property sales in October 2010 stood at 487 total sales, compared to 547 September sales and 574 sales in September 2009. The breakdown was 351 single family home sales and 136 condos.
The median sale price for single family homes was $147,500 for October 2010, compared to $155,000 for single family homes in September, and $151,000 last October. The median sale price for condos was $158,525 in October 2010, higher than last month’s figure of $150,450, but lower than the October 2009 figure of $220,000. Last year’s figure was a statistical anomaly likely caused by an influx of high-end condominium buyers all closing during the same time period.
“As we enter the traditionally busier season, the local real estate market appears to be on solid ground,” said 2010 SAR President Erick Shumway. “Now that the mid-term election is behind us, and the foreclosure freeze seems to have thawed, there is certainly reason for optimism. Sales and showing activity have been consistent, and even with 50 percent of the market dominated by distressed sales, the median prices are also relatively steady.”
The median sale price for single family homes over the past 12 months was $163,900, and for condos was $169,000. Last year at this time, looking back over the previous 12 months, the median sale price for single family was $160,000, and for condos was $199,450.
The overall inventory dropped from 6,226 in September to 6,069 in October, a good sign for future price appreciation as long as demand remains steady. The months of inventory for single family homes in October 2010 rose to 11.1 months from the figure of 9.9 months in September. The figure was 9.3 months in October 2009. The rise reflects the lower sales during the month. Months of inventory represents the number of months it would take to sell all available homes at the current pace. For condos, the figure rose to 15.9 months from 15.1 months in September. It was at 15.0 months in October 2009. Once the market reaches the 6 month level it is considered to be in equilibrium between a buyers and sellers market.
Distressed property sales continue to be the primary reason for the overall median price at a level lower than would be expected, with normal arm’s length sales garnering three-times as much as bank-owned properties, and twice as much as short sales on average. For example, condo foreclosure sales saw a median price of $90,000 in October, compared to a median price of $273,000 for arm’s length condo sales.
“The level of distressed sales dropped a little in October, from 54 percent down to 50 percent, which is most likely attributable to some major banks delaying many foreclosures to check on potentially flawed paperwork,” explained Shumway. “When the distressed sales are finally weeded out, and we have primarily arm’s length sales, we should begin to see a return to traditional, historic pricing trends in the market.”
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