Generally a slow week compared to last year. The contracts reported in Downtown Sarasota last week probably overstate demand by 50% as 9 of the 18 new contracts were recorded in the Vue. Most likely these contracts were actually executed much earlier. See my notes from the 11/4/2017 report for an explanation. The same issue is affecting both the 4 week and 13 week figures.
This was a big week everywhere but none looking as big as downtown Sarasota. The figures for this year are distorted from 9 listings in the VUE closing this week and being entered in MLS for the first time. In most large new construction projects, only a few sample listings are maintained in MLS. This keeps MLS manageable and from being overrun, so to speak, by a single building. If all of the VUE listings were entered from the project start, Zillow would be a mess with every other listing being in the VUE.
When listings that were not previously entered in MLS eventually close, the listings are often entered in MLS at closing for agent/broker credit (as was the case with these listings). The listings still have to go through the same MLS progression. The contract date, listing date and sale date are entered the day of closing giving each the same date. Undoubtedly all 9 of the new construction listings went to contract much earlier, perhaps even in previous years. Again, there is nothing wrong with this, you just have to be aware of it as you study the results. Demand Downtown was not up 1300% last week. (Another unavoidable side result of this is that the days on market stat will be ZERO for all such listings – be leery of any broker or agent including new construction sales in their quoted days on market performance).
Get ready for many weeks like this as loads new construction starts to close.
Another interesting thing to watch with regard to new construction closings, is how much of it ends up back on the market. I will try to highlight that for you.
The information in this post pertains to Downtown Sarasota Condominium sales for the 12 months ending 9/30/16 (current year/ period) and 9/30/15 (previous year/period). All data is from the My Florida Regional MLS for the time periods mentioned, ZIP code 34228 (Downtown Sarasota), and condo property style.
Demand for Downtown Sarasota Condos is increasing
The raw numbers show sales over the past year were down 1%, compared to the previous year (329 TY vs 332 LY). As mentioned in other updates, delayed closings on new construction sales more than account for this shortfall. As of 9/30/16, there were 36 pending sales on new construction residences, where the contract date was in the current year.
While these properties were placed under contract during the current period, they will not close nor be reported as a sale until the building is ready for occupancy. The contracts, however, represent true demand during the period, even though they are not reflected in the sales figures. There are also 28 pending sales from the prior period, which understated demand during that year. If pending sales were added into total sales for both years, then 2016 sales would be higher than 2015 by 1% (365 TY vs 360 LY).
Click box to see current Downtown Sarasota Condominiums listed for sale by price point
The Median Sale Price of a Downtown Sarasota Condo is increasing
The median sale price of a downtown Sarasota condominium increased 14% from $442k last year to $505k this year. Across Sarasota County, the median price of a condo only increased 8% from $190k ly to $205k ty. Clearly, “buy low / sell high” works but not as well as “buy high/ sell higher.”
If nothing else, this shows not every property gets painted with the same brush as prices move up or down. Properties in the most desirable areas do better in both types of markets. When prices are appreciating, markets like downtown and the barrier islands will increase more than other areas. When prices are falling, they will take less of a hit.
Downtown Sarasota Condos are Selling More Quickly
Another sign the market is heating up is the speed at which listings sell. Last year, 33% of all sales went to contract in 30 days or less. This year, 42% of all sales took 30 days or less to get a contract. Median days to contract for all sold listings dropped accordingly from 66 days last year to just 51 days this year (down 23%).
The Average Listing Sells Very Near the List Price
Last year, the average downtown condo sold for 95% of final listing price, which is great. However, in the prior 12 months, that figure has bounced up another point to 96%, which is phenomenal.
Most Downtown Sarasota Condos sell for Cash
Two thirds of all sales in both periods sold for cash (no financing). This is another attribute of the downtown market that supports property values. When the market crashes or interest rates rise, the owners in the downtown market will feel less pressure than those areas where more homes are mortgaged.
All of the data used in this post were obtained from the My Florida Regional MLS for condominium SALES in the downtown Sarasota Area. I used all condo sales in ZIP Code 34236 on the east side of the Ringling Bridge for calendar year 2016 through the end of August.
The Smaller Side of Downtown Sarasota Condominiums
If you are just looking for a nice place to enjoy Sarasota and get away for the winter, maybe a 1 BR condo is all that you need. As shown below, there have been 23 sales in the category over the past 8 months with prices ranging from $120,000 to $437,000. The limit we are discussing here is up to $1,000,000 but no 1/1 sold for any higher than the 437,500 in any event.
For a 1/1, the under $200,000 price point puts you in either an older (1957 built) building or something on the very edge of downtown, like Central Park in this case.
If your price point is in the 200’s to very low 300’s, you could end up with a large 1BR/1BA (800-1000 square feet) residence with 1-2 garage parking spots on a low floor in the Renaissance (750 TamiamiTrl). Also for a mid-200’s price, you might be able to find a 675 sf unit in one of Sarasota’s most nostalgic buildings, the Frances-Carlton. Walk through the building and you will think you are a character in Fitzgerald’s The Great Gatsby. And for a good reason, the building opened about the time the book was published.
To see all 2BR/2BA and larger condominiums currently listed for sale under $500,000 in Downtown Sarasota, click here.
The mid 300’s to mid-400’s represents the highest selling prices for anything smaller than a 2/2. For this price, you can get a nice-sized residence in the heart of downtown (like in1350 Main where the highest priced sales was located) or direct bay view in either Alinari or Renaissance (on the Trail).
To download the complete list of sales for all 1BR/1BA condominiums that sold in downtown Sarasota for the 8 months ended August 31, 2016, click here.
The Most Popular and Abundant Downtown Sarasota Condonimium- 2 Bedroom/2 Bath Models
The 2/2 floor plan is by far the most popular downtown, accounting for almost 72% of all condominium sales during the 8 month period. You could say that the majority of them sell since they comprise the bulk of the total supply downtown. This is true, but the 2/2’s suck up more than their share of sales as only about 60% of all downtown Sarasota condominium residences are 2/2’s.
To see all 2BR/2BA and larger condominiums currently listed for sale between $500,000 adn $1,000,000 in Downtown Sarasota, click here.
Your best bet under $300,000 is going to be Central Park, located on the southern edge of the ZIP code in the 800 block of South Trail. Dolphin Tower could also have a listing in this price range. In the $300,000 – $400,000 range, try looking in Broadway Promenade, Cityscape, Gulfstream Towers, or the Renaissance. Note that the under $400,000 listing price comprised only a third of the 2/2 sales, so don’t expect a huge selection in any one building. These listing are going to be peppered around downtown.
To download the complete list of sales for all 2BR/2BA condominiums that sold in downtown Sarasota for the 8 months ended August 31, 2016, click here.
Things open up considerably in the $400,000-$600,000 price point. You could find a nice residence in Alinari , Sunset Tower, 100 Central, Palm Place, or Regency House. The over $600,000 price might be found and Alinari, 1350 Main, Bay Plaza, Lawrence Point (i , ii, and iii), One Watergate, Condo on the Bay (888 and 988), or Essex House.
The 3 Bedroom Models – a Rare Find under $1 Million
There were only 15 sales of 3 bedroom models during the period. Six of them were in Rivo, and they were sold for between $500,000 and $550,000. At the upper end of the price range, watch Bay Plaza as it was the second largest source of 3BR sales with 3 selling at prices between 650,000 and 950,000. Other sales were scattered throughout downtown.
To download the complete list of sales for all 3BR condominiums that sold in downtown Sarasota for the 8 months ended August 31, 2016, click here.
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Here are 5 takeaways on September 2015 Downtown Sarasota condo market statistics.
- Sales are lagging the previous 12 months in units (11%) and dollars (7%). The 4.7% increase in the average selling price accounts for the spread between units and dollars.
- Through May 2015, new listings (rolling 12 month basis) were 15% below the previous 12 month period. However, starting in June 2015, new listings began to exceed the previous year and have done so now for 4 months in row – to the point that new listings for the past 12 months now exceeds the previous 12 months by 5%.
- Listing priced right continue to move very quickly. One-third of all listings sold in the past 12 months have gone to contract in 30 days or less.
- Most sales downtown are cash sales but to a lesser degree than the previous year. Two-thirds of all condominiums that sold in the past year were cash transactions. Last year 76% of all sales were cash.
- The penalty for an unreasonable asking price is high. While well-priced homes sell quickly, others languish. Downtown buyers are savvy and patient (a difference between now and 2005-2007). Just because it’s on the market doesn’t mean that it will sell. In the past 12 months there have been 123 expired or withdrawn listings, more than one for every 3 sales. Additionally, the average days on the market for unsold inventory is 196 (and counting) compared to 148 days on the market for sold listings.
Sales in the buildings from the graphic below accounted for 52% of condominium sales in ZIP code 34236 during the 12 months ended June 30, 2015 and about two thirds of all condo sales east of the Ringling Bridge. There are only 55 residences now listed for sale in this group of buildings or less than 4 months of supply. Unit sales are down 7% over the previous 12 month period due mostly to the lack of inventory. While average sales prices in anyone building can change between years for a variety of reasons other than appreciation (shift to or away from more sales with water views, larger residences, etc), most buildings did experience an increase. However the weighted average sales price of the group fell 3% t0 $720,000 from $740,000 during the previous year. This was caused by a change in the sales mix among the buildings- a direct result of the inventory available more than anything else.
For the details on each sale transaction, subscribe to my newsletter here and download copies of sales histories for each building.
Inventory and new listings continues to be the story in the downtown market (as well as the entire county). At the end of the month, there were 179 residences for sale downtown compared to a very low 202 at the same time last year. As noted in last month’s post, the 10 year record low for unsold inventory is 172 residences set in September of last year. New listings for June eked out ahead last year 33 to 28 but did little to dent the 15% shortfall over the past 12 months compared to the previous 12 month period.
The struggle in finding something under $500,000 downtown is getting impossible. As of today there are just 59 residences on the market under $500,000. Twenty seven of these have fewer than 2 bedrooms and 2 baths. If you want a 2/2 under $500,000 that was built after 1985, you currently have only 8 choices.
There are admittedly new construction residences on the market right now that are not posted in MLS, probably more in total that the 179 resales shown in MLS. However, there are almost none priced under $500,000.
Unit sales in May increased 20% over the previous year but are still down nearly 11% over the past 12 months. The decline in units sales is due to the lack of inventory. Over the course of the past year, new listings have decreased 15% over the previous 12 month period.
The average selling price for the month of May was $682k this year compared to $798k last year. This is the result of a change in mix, due in large part to the same reason sales are down- low levels of inventory. The lack of inventory and real increase in prices is pushing buyers into smaller and older purchases (both of which are generally priced lower than larger newer/larger residences). During May of last year, 20% of unit sales were smaller than 1,000 square feet. During May of this year 24% of purchases were smaller than 1,000 square feet. Similarly, during May of last year 26% of all condos purchased in 34236 were built prior to 1980. For May 2015 37% of purchases were older than a 1980 build.
The 182 residences on the market at the end of May is not a record (the 10 year record low was 172 in September 2014), but for this time of year it is still very low. We could easily get under the 172 by September, perhaps well below it.
The average asking price of unsold inventory is up about 14% over last year. While part of this is undoubtedly real price appreciation (or the expectation of the same), mix is still playing a role here. The smaller-sized residences are starting to disappear from unsold inventory. At the end of May last year, 22% of unsold inventory was comprised of residences fewer than 2 bedrooms and 2 baths. At the end of this May, only 14% of active listings fell into that category.
All comments relate to 12 month figures
The best place to start this story is at the “New Listings” line in the graphic below (click image to enlarge). New listings were down 12% over the past 12 months, a situation that impacted nearly every other statistic. Unit sales were down 14%. Expired and withdrawn listings were down 14%. Sales with 30 days or less marketing time decreased by 32% as more sales came from older listings. Average days on market for sold listings increased 17 days over last year.
The average price increased by 8% from $620k to $668k. This is a combination of mix changes (toward higher end buildings/residences) and appreciation. Nationally, home prices have increased 4% during this period while the Tampa and Miami Markets are up 7% and 8%, respectively (Source: Case-Shiller April 2015 release). Given the performance of these markets, 8% for Sarasota is not unrealistic.
However, mix did play a big role the change in average price. For example, The Ritz Beach Residences and Orchid Beach Residences on Lido are two of the highest price buildings in the county. Over the past 12 months, a total of 13 residences sold in these two buildings for a total of $36.5 million. These 13 sales accounted for 17% of dollar sales during this 12 months. In the previous 12 month period, only four residences sold from the same two buildings for a total of just $9.4 million. If you look at sales in ZIP code of 34236, excluding these two buildings, then the average sale price actually dropped 4% from $601k to $578k. This could be mix as well- fewer sales coming from newer buildings, more sales from smaller residences, etc.
While downtown Sarasota is still largely an all cash market, all-cash transactions did drop from 78% of sales to 68%. The financed transactions are heavily skewed toward the lower end of the market with 80 of 103 financed sales being in transactions where sale price was less the average sale price of $668,000.
Unsold inventory remains very low at 192 residences, just 20 off the low set for the 2000’s in September 2014. This figure does not, however, include the number of new construction residences on the market from the various new construction projects around town,which are significant. Still, all possible new construction residences included, unsold inventory is less than half the peak month of April 2007 when 706 residences were listed for sale. Additionally, there are very few new construction residences offered under $1,000,000 and virtually none under $750,000.