Supply of homes, rising prices cause affordability concerns
The Sarasota-Manatee housing market outperformed both the national and state marks in January sales, new statistics and reports released Wednesday indicate. While closed sales rose locally in year-over-year comparisons, they fell across the country and state.
Median home prices also increased again in the North Port-Sarasota-Bradenton market, Florida Realtors data showed. But increases in pending sales and new listings bode well for the months ahead. Statewide, both of those figures also rose.
“The increase in home sales and prices is a good indicator of a strong housing market in Manatee and Sarasota,” said Greg Owens, president of the Realtors Association of Sarasota and Manatee. “The trend continues to show economic strength and positive growth to our area.”
For the most part, Charlotte County’s market slumped in many categories.
Nationally, existing home sales — single-family homes, condos, townhomes and co-ops — dropped for the second consecutive month and recorded the largest decline on an annual basis in more than three years, the National Association of Realtors reported.
In Florida, closed sales of all housing types fell 1.3 percent.
In Sarasota-Manatee, January’s closed single-family home sales rose 10.9 percent in a year-over-year comparison and condo sales jumped 17.1 percent.
The median sales price on homes increased 7.6 percent to $289,495 and condo prices ticked up 0.3 percent to $210,583. On single-family median prices, only Collier County ($438,500) and South Florida ($330,000) topped Sarasota-Manatee.
Statewide, the median sales price for single-family existing homes was $240,000, up 9.1 percent from the previous year, with condo-townhouse properties at $179,900, up 11.7 percent last month over the year-ago figure. January marked 73 consecutive months that the statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year.
Nationally, the median existing-home price for all housing types in January was $240,500, up 5.8 percent from January 2017′s $227,300. January’s price increase marked the 71st straight month of year-over-year gains.
Scarcity and affordability
Locally, the inventory of single-family homes and condominiums tightened last month compared with January 2017. The slackening inventory and price increases have implications for affordability.
“There’s an ongoing shortage of housing inventory in many markets across Florida,” Florida Realtors president Christine Hansen said Wednesday in a news release. “January’s statewide homes sales reflected the tight supply, and — when combined with rising median sales prices — it puts pressure on potential homebuyers.”
Lawrence Yun, the national Realtors group’s chief economist, said January’s slump in closings highlights the housing market’s striking inventory shortage to start 2018.
“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” he said. “While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace.
“It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”
The country’s total housing inventory at the end of January rose 4.1 percent to 1.52 million existing homes available for sale, but that figure is still 9.5 percent lower than last year’s 1.68 million and has fallen year-over-year for 32 consecutive months.
In Florida, last month’s for-sale inventory remained tight, with a 3.9 months supply of single-family homes and a 5.9 months supply for condo-townhouse properties, according to Florida Realtors. Inventory often is expressed in how many months it would take to sell the existing supply of homes. A market is considered in equilibrium between buyers and sellers when it has a six month supply.
Sarasota County had a 4.5 months supply of homes, a 10 percent decline year-over-year, and a 5.5 months supply of condos, a 6.8 percent drop. Manatee had a 4.4-month supply of homes, a 2.2 percent decrease, and a 5-month inventory of condo-townhouse properties, a 4.2 percent increase.
“The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability,” Yun said. “However, there’s hope that the tide is finally turning. There was a nice jump in new-home construction in January and homebuilder confidence is high.”
Local pending sales
In Sarasota-Manatee, pending sales increased by 14.8 percent from January 2017. Condo pending sales jumped 20.9 percent, while single-family homes rose 11.8 percent. When compared with December 2017, combined pending sales in the two-county area increased by 45.5 percent, an indicator of future closed sales this season. New listings, or the number of properties put onto the market during the month, increased from last year by 7.3 percent.
In Charlotte County’s single-family home market, January 2018 sales fell to the lowest monthly total in the past 12 months to 278 closed deals. The previous January logged only seven more sales, while March through August performed best, with more than 400 sales each month. December came close with 397 purchases.
The median sale price rose $15,000 to $210,000 in January year over year, but fell by $7,500 from December. Dollar volume decreased last month to $71.3 million, its lowest level since the previous January
Pending inventory, active listings and months supply of inventory all dropped year over year. New pending sales hit the same mark this past month as in January 2017 — at 438. New listings surpassed the number in every month last year, hitting 662.