Heading into the second quarter, the uptick in activity from pent-up demand in March quickly whittled away the high inventory numbers seen at the beginning of 2019. This left Q2 as a balanced market where a slowing of inventory creation gradually shifted the market to favor the seller by end of June. Overall, this behavior is in line with typical seasonal patterns and market fundamentals remain healthy with the region poised for growth and opportunities for both buyers and sellers.
Drayton Saunders, President of Michael Saunders & Company, discusses this and other notable factors seen between April and June; in addition to luxury consumer trends and whether listing before peak season can actually position sellers for success.
The Full General Market Report is Available Below
The Full Luxury Market Report is Available Below
- Inventory remains up year over year but is slowing with the summer season
- Price appreciation numbers remain stable but are likely influenced by new construction
- Well-priced and well-positioned beats the off-season slow down and captures buyers still on the lookout
- Significant slowing but significant sales in the luxury market
Inventory numbers remain up year-over-year, but a slowing in new listings has allowed for a balanced market that swayed with subtle movement from favoring the buyer to the seller. New listings coming to market will be the number to watch throughout the remainder of 2019, as current inventory still provides buyers with a wide array of choice, but some may be holding out to see what Q3’s listing season will bring. An important thing to note is while the market may be technically a “seller’s market,” trends have shown that savvy buyers are only activating if the competitive set of location, price and condition are aligned to suit their interests.
Price Appreciation and New Construction
As Drayton mentions in the market update video, the overall narrative of price appreciation throughout the region is positive. However sellers last quarter may have experienced a slower or flat appreciation depending on the amount of new construction in their area. At Michael Saunders & Company we always beat the drum of the hyper-local nature of real estate. That said, it’s good to “look under the hood” at the actual numbers and local happenings in your community to see what outlying factors could be contributing to the increase or decrease in valuation. Typically, we see Sarasota County leading the tri-country region for median price, but with single-family home development on the rise in areas like Lakewood Ranch and Parrish, closed new construction reported in MLS has likely nudged this number to the top of the heap this quarter. Other factors on a more national scale that affected new construction cost increases include the rise of lumber costs based on import restrictions that only recently softened. According to local builders, prices are unlikely to come down for communities already in production, so this could be a new normal pending on future trade relations.
Those looking to get on the market with a resale property should consult their Realtor in this instance to discuss the best ways to remain competitive – whether it means impactful renovations with high ROI or a pricing strategy that attracts buyers by coming in below the new construction price tag.
|County||Median Sale Price (All Prices)|
|Sarasota||$264,000 (UP 2.3%)|
|Manatee||$270,000 (UP 1.9%)|
|Charlotte||$210,000 (UP 2.4%)|
Well-Priced. Well-Positioned. Positive Results…Even in “Off-Season.”
A consistent trend, and likely a lesson learned from the past, is that well-priced and well-positioned homes are more likely to sell. Sounds like common sense, right? Not always. Those who have lived in the region for a while have come to a general conclusion that summertime is for repairs, fall is for listing, winter and spring are for buying. Overall, this does ring true. Many people choose to vacation in the area or come down for a seasonal stay when the weather turns colder in other areas of the country, and we do see a bump in activity. However, as more and more are choosing Florida for their primary residence – whether based on taxes, cost of living, job opportunities, etc – the summertime is becoming a first look and pulse reading for potential residents looking to get in before the school year or wanting to beat the rush of activity. With this in mind, summer could be YOUR right time to list or even to buy. Sellers can look forward to standing out from the crowd in a season known for lower inventory and buyers can avoid the competing offers of the fall and winter.
The Luxury Market and Buyer
The second quarter in 2019 for Gulf Coast revealed both significant sales in the ultra-luxury category and significant slowing across the general luxury landscape. As seen in studies of the world’s wealthy commissioned by our affiliate Luxury Portfolio International (LPI), we see this having as much to do with the buyer profile as we do the state-and-local-tax regulations that are encouraging the affluent to establish primary residency in low/no state-tax states. Diving deeper into the value and belief sets of buyers in various price points also reveals why this seemingly odd market behavior isn’t really that odd at all.
“For affluent homebuyers everywhere, a house becomes a home when certain needs are met: 1) security and privacy, 2) the ability to grow as a person, 3) having a personalized/customized space and 4) a place that facilitates happy memories with family and friends.”
Source: Luxury Porfolio White Paper – LUXURY REAL ESTATE: WHAT MATTERS MOST TO TODAY’S GLOBAL ELITE | 2018
Overall luxury buyers are not in a position of urgency and will only purchase property they feel meets their needs and excites them. This equates to a limited pool of prospects even in peak season and a competitive landscape where sellers of resales are having to come down in price to combat the allure of the shiny and new. This is what we observed in the general luxury market last quarter with the current inventory not “sparking joy” (in the words of Marie Kondo).
On the flip side, out-of-town buyers in the $3 million+ category are seeing the high-value proposition the state of Florida affords, the Gulf Coast specifically. Luxury Portfolio revealed that consumer confidence remains high for real estate and as such more are choosing to invest their time and money in the area. Thus far in 2019, there have been 49 sales over $3 million across the Sarasota, Manatee and Charlotte counties. In all of 2018, there were 62 sales.
Michael Saunders & Company has a total luxury market share of 37% in the $3 million+ category.
We’ll continue to bring additional insights throughout the year. Don’t forget to comment below and on the market report video with the content you want to see in our next market report update.