Sales moderate in July 2011; inventory continues to drop

Members of the Sarasota Association of Realtors® reported 599 property sales in July, which was 14.3 percent higher than the July 2010 total of 525 sales.

There were 445 single family home closings and 154 condo closings in July. In 2011, four months have topped 700 in sales, with June reaching 728. In May, sales peaked at 796 sales during the height of the spring buying season, a pattern that has been evident for the past few years. Last July, sales also moderated as the slower summer season kicked in and the Federal homebuyer tax credit expired.

In July 2011, the total inventory of available properties dropped again to the lowest level in more than a decade. There were 2,829 single family homes and 1,656 condos on the market, for a total of 4,485 available properties. This is more than a 7 percent drop from the June 2011 total of 4,830, and a 25 percent drop from the July 2010 figure of 6,054. The decreased inventory could spur stronger competition for homes and condos, and subsequent price appreciation.

The median price of a single family home in July was $169,900, just slightly lower than the June figure of $175,000. The July 2010 figure stood at $155,000, so the median price was up almost 10 percent from last year at this time. The condo median price slipped to $145,000 from $185,00 in June, but was 14 percent higher than last July’s median of $127,000.

The months of inventory rose to 6.4 months for single family homes, from last month’s figure of 5.9 months. For condos, the months of inventory also rose to 10.7 months from June’s figure of 8.2 months. Both figures remain far below the highs of 25.3 months for single family (in early 2009) and 41.7 months for condos (in late 2008). This statistic represents the time it would take to sell the existing inventory at the current month’s rate of sales. The 6 month level is traditionally a point which represents equilibrium in the market between buyers and sellers.

Aside from the lower inventory, another bright sign in July 2011 was the increase in pending sales from 754 in June to 799 last month. Last year, pendings were trending downward in late summer which brought a decrease in total sales in the fall.

“While we did see the market seasonally moderate in July from the hot selling pace we’ve experienced in the first half of 2011, these numbers still reflect strength in the market,” said SAR President Michael Bruno. “There hasn’t been an alarming drop in sales, and the higher number of pending sales signals a healthy fall market. The inventory of available properties remains at a low for the past decade, and this historically means we should experience upward pressure on prices. The percentage of distressed property sales has remained stable, which is another positive factor.”

The overall percentage of distressed sales (short sales and foreclosure sales) remained at 38 percent of the July 2011 sales. That compares to 47 percent as recently as February 2011 and a high of 51 percent in November 2010.

“The impact of recent events in the financial markets may cause some uncertainty in terms of national home sales,” explained Bruno. “But we all know that real estate is local, and Sarasota is traditionally a market that emerges from tough times with strength and leads the new wave of prosperity.”