No matter how you slice it, 2013 was an exceptional year for Southwest Florida’s housing market. In fact, the Sarasota Association of Realtors has officially reported its second most productive year ever in terms of the total number of properties sold. Indeed, were it not for the shortfall in available properties that these many months of record sales resulted in, we suspect that 2013 might well have exceeded 2004 as our market’s best year ever.
Heightened Demand Price-wise, in classic supply-versus-demand fashion, our reduced stock of available properties—set against month after month of heightened demand—resulted in an 11.5% year-over-year increase in Sarasota County’s median home price. Manatee County’s median price rose by 22.8%. Such double-digit increases have prompted some observers to express concern of another real estate bubble in the works. Can this be true? Have home prices throughout the region suddenly “spiked” to unsustainable levels again? Recovered We not only believe they haven’t, but also feel that “recovered” is the more appropriate term to describe how prices reacted to the market forces of 2013. The following ten-year perspective shows why. As of this past December, the median price for properties in Sarasota County was $184,000. Ten years ago—in December 2003—it was $210,000. Moreover, you would have to turn the clock back even further—to December 2002—for prices to be comparable to what they are today. Back then, in the relative stable market that preceded the boom, the median price was $180,000. (Source: Trendgraphix). This means our market is back to pre-boom pricing. The same general pattern holds true for Manatee County, where the current median is $199,000. To revisit the last time the county had a median price in this range, you would have to travel back to December 2003, when the median was $200,000. Meanwhile in December 2005, during what hindsight now shows was the height of the region’s real estate boom, Sarasota County’s median price rose to $362,000, nearly double what it is today. Manatee’s rose to $325,000, an amount 63% higher than its current median price. By December 2010, Sarasota County’s median had dropped significantly to $135,000 and Manatee’s to $156,000—amounts that led many national real estate experts to declare that our bottomed-out market was one of the most undervalued in the U.S. Such declarations helped revive national and international interest in our market; and no doubt added to the number of buyers and investors who continue to find outstanding values in the Sarasota-Manatee housing market to this day. An Ideal Balance In actuality, the Sarasota-Manatee market has benefited greatly from 2013’s recovery in prices. As a result of these higher prices, fewer sellers owe more on their mortgages than their properties are worth; and are in a more comfortable position to sell without dire consequences to their financial profiles. As such, our region has been trending toward the ideal balance of properties necessary to meet current rates of demand; and should therefore chart more sustainable levels of price appreciation going forward.
