Sarasota-Manatee remains a 'pretty darn stable' real estate market

Despite the highest mortgage rates seen in more than 20 years, the collapse of three large banks last spring and a persistent belief the economy will experience a recession, the Sarasota-Manatee real estate market has not seen price decreases or a sharp drop-off in demand, according to local real estate professionals.

Craig Ceretta, managing broker with Premier Sotheby's International Realty in Sarasota, said over the past five quarters the median price of a home sold in the two-county area has stayed remarkably steady, hovering between $500,000 to $525,000 for a single-family home.

"That's pretty darn stable," he said.

Median prices have stayed near record highs for more than year, even as more homes came onto the market and the time it took to sell them sharply increased.

At the height of the real estate frenzy in the summer of 2021 the median time to contract for listed homes was less than a week. Now, that figure for a single-family home stands above 50 days.

Brian Tresidder, the president of the Realtors Association of Sarasota and Manatee and sales manager at William Raveis' Siesta Key office, called the current market "healthier" than the breakneck sales pace following the onset of the COVID pandemic.

Tredsidder, who obtained his real estate license in Sarasota in 2006, said the number of homes on the market has doubled, but because inventory had dropped so low, even doubling the number of properties for sale has left sellers with the advantage.

“The market resembles what we would consider a good real estate market before COVID,” he said. “Our numbers resemble what they were in 2019.”

'Give and take for buyers and sellers' in Sarasota-Manatee

He said during the heated market following COVID's onset, buyers and their agents often became frustrated after being repeatedly outbid on properties despite making offers above list price.

Now, for sale properties aren't being snatched up within a week, leading for a more normal process with some give and take between buyers and sellers.

"Right now, I would say it’s a healthier environment for all involved,” he said.

While the median price for a property has not changed significantly for more than 18 months, the average price has dropped about 9.4%, Cerreta said.

Cerreta said the average price for a home sold in Sarasota-Manatee came in at $669,461 in the second quarter of 2023 while the average price was $669,500 at the end of the first quarter of 2023.

Those two almost identical average price points were off from the peak when the area's average price came in at about $713,000 at the end of the second quarter of 2022.

In some ways, the local real estate market's success has become it's biggest challenge going forward.

Robert Goldman, a Realtor with Michael Saunders & Co., said that about 50% of all the properties in Sarasota County have had some form of price adjustment.

Stellar MLS data, the local multiple listing service used by Realtors, does not break down price adjustments by increase or decrease, but it is likely that the vast majority of those price adjustments were price decreases, Cerreta said.

Goldman said that 48% of properties had price decreases, while Cerreta was able to verify 54% of Sarasota County properties currently for sale have had a price adjustment at some point since being listed.

Goldman said that many sellers do not have a realistic outlook on the value of their home coming out of what had been the strongest sellers' market in years.

"The housing market is strong but pricing strategies need to be in accord with a more normative market," Goldman said. "Sellers need to align their expectations with current market conditions."

Realtors often don't want to anger their clients by suggesting a lower price, which can affect how quickly properties sell, he said.

Goldman said he recently took over a listing that had been sitting on the market for nine months.

Adjusting expectations

When property sits on the market for that long it becomes stigmatized as buyers start to wonder why the property has not sold. Goldman said there was nothing wrong with the property, other than that it had been listed too high.

Goldman said the first thing he did was slash the price to below its true market value, but advertised the sale as if there was a timer to go under contract within the next six days to generate buyer interest in possibly getting a discount.

"And then we had multiple offers — all of them above the list price — and close to the true market value of the property," Goldman said.

The property is now under contract.

Cerreta said that he believes that both sides of the table can have unrealistic price expectations, noting that all the news articles about an expected recession has buyers thinking prices have come down more than they actually have.

“The sellers aren’t believing that it did come down 10% from a year ago and the buyers aren’t believing it’s stabilized, and you’re ending up with maybe a 20% gap between buyer and seller expectations," Cerreta said.

Looking at the pace of sales compared to how many homes are for sale gives what industry professionals call months of supply.

Realtors consider a balanced market to be when the number of active listings would be exhausted after six months at the current sales pace.

Cerreta said there's just 1.9 months of supply available in Sarasota-Manatee for homes priced up to $500,000, 2.5 months of supply for homes priced $500,000 to $1 million and 3.9 months of supply for properties priced between $1 million to $2.5 million.

Those prices indicate sellers continue to have the advantage at the negotiating table for all properties below $2.5 million in Sarasota and Manatee counties.

However, there is a 9.2-month supply of homes from $2.5 million to $5 million and 23.2 month supply for homes priced above $5 million.

"The 1.9 months of supply for under $500,000 is typical," he said. "But $500,000 to $5 million are all below averages from the past."

He attributed some of the weakness in the $5 million and above market segment — which had 148 properties for sale at the end of the second quarter — to the spring bank collapses and uncertainty about the economy.

However, he said in recent weeks that several properties on the high-end of the luxury market have gone under contract, including several homes priced above $10 million, indicating the deep-pocketed buyer has fewer worries about the economy than in recent months.

"My Realtors are telling me that they are getting more action on the $10 million and above houses in the past two weeks as they had over the past two months,” he said. “It looks like things are less concerning than they were three or four months ago and the players are coming back into the market.”

The outlook for the status quo to continue looks strong for the remainder of 2023.

Cerreta pointed to the total number of properties sold during the second quarter, which was 4,522. Only the second quarter of 2021 and the fourth quarter of 2020 saw more closed sales in recent years, he said.

He said there were 4,255 closed sales during the second quarter of 2019, close to the same demand experienced this summer.

The only major difference is price. The average price in 2019 was more than $200,000 lower than this past summer at about $401,000.

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This article originally appeared on Sarasota Herald-Tribune: Sarasota-Manatee real estate buyers, sellers adjust to market