With the world’s financial markets reeling from the uncertainty surrounding the European debt crisis, it’s little wonder that investors big and small are opting for the relative security of America’s recovering property markets. The turbulence that defined the U.S. real estate market during the housing bubble and its aftermath has been largely, if not painfully, wrung-out. Thus, with prices slashed by as much as 50% from their 2005 peak, real estate offers the potential for an attractive return-on-investment when held for the long term and allowed the opportunity to appreciate.
Today’s well-capitalized investors — motivated by unusually strong demand for rentals, rising rents, and bottoming home prices — have joined traditional end-use buyers in driving inventories of available properties throughout Southwest Florida to their lowest levels since 2005. As of the end of last month, there was a 4.7-month supply of available properties throughout Sarasota, Manatee and Charlotte Counties — based on May’s rate of closed sales. That’s well below the 7-month supply indicative of a healthy, balanced market; and a strong indicator that ours is steadily transitioning from a buyer’s to a seller’s market.
Although it’s premature to declare a trend, in the three-county market area served by Michael Saunders & Company, median prices are starting to react as would be expected when demand for properties outpaces supply. May’s median in Sarasota, Manatee and Charlotte Counties posted a sharp increase over April and an even better improvement over the same time last year. Plus, with inventory in the lower price ranges drastically diminished, this shows that higher priced properties are being absorbed. As such, it is not uncommon for a well-priced property, irrespective of its price range, to encounter multiple offers.
Buyers are plentiful; their confidence in our market’s value and long-term viability unshaken by the financial turmoil that is cascading through Europe and rankling investor nerves in markets everywhere. Closed sales for May in Sarasota County were 3.1% higher than last May; and pending sales, a strong indicator of our market’s future performance, were up by 32.5%. In Manatee County, May sales were up by 6.3% over last May; and pendings up by 45.7%. In Charlotte County, closed sales were down 3.3%, but pendings up by 28.7%.
If you have a home to sell, now is an exceptionally good time to get it in front of today’s highly-motivated buyers. Prices have stabilized in most price ranges under $1 million, demand is heavy, supplies low; and buyers are increasingly anxious to move their savings into traditional long-term havens of growth.