September Homes Sales Ease, Inventory Tightens – New Construction off 10%
According to the National Association of Realtors, the Sarasota real estate market has begun to stabilize this year. Sales on Sarasota homes have eased a bit, and on top of that, there are actually less homes on the market.
Each region of the country has seen a different degree of decline in home sales -- with the exception of the South, which had an ever so slight increase in sales. All kinds of real estate -- single-family homes, townhomes, condominiums, and co-ops -- have had decreased sales, meaning there's been an overall fall of 1.9 percent in sales in just the last month and in the last year, there's been a steep dip of 14.2 percent! 6.18 million units, in total, were sold this year.
But this decrease in sales is not something to panic about. First of all, it's really only an indicator that the Sarasota real estate market (and market in general) is stabilizing, which means more home buyers are bound to come out of the woodwork and start participating in the market.
And, even so, the reason there has been a downward slant in sales is because in 2005, the sales were outrageously high -- there was a boom in homeownership. This was probably a result of the aging baby boomers who were buying homes left and right (and still are, but perhaps to a lesser extent this year, as they're mostly all sheltered by now). But it's becoming more common every year for these baby boomers, which consist of a huge portion of the home buyer population, to buy a second home. This could mean that the market sees an upward trend or at least settles at a comfortable pace as these home buyers start anchoring themselves in other cities and states.
So, as someone interested in Sarasota real estate or Sarasota homes, you're probably wondering what all of this means to you. The good news is that the South is one of the stronger markets. Sarasota, the cultural center of Florida, will always attract home buyers and with the increase in second-home ownership, this is truer today than it's been in a long time! Sarasota real estate, like the market in general, is not in bad shape at all (though it has seen a decline in sales like many other cities). It still happens to be in the only region that saw an increase in home sales this past year and that bodes well for it.
New homes are not being constructed as much as they were before (about 10% less). But this is inevitable. After every boom, there is some sort of crash, and luckily things seem pretty stable. As well, real estate doesn't have limitless possibility. The United States population has finally reached 300 million, and someday there simply won't be enough room for everybody. But right now there is still plenty of potential in the market and Sarasota, especially, offers great potential for profit for those interested in Sarasota real estate.
A stable real estate industry, while not as a wildly lucrative as it was a year ago, is not a bad thing. The conditions for profitable investment in real estate are typically stability and only mild inflation. It's nice to have a boom like in 2005, but that leads to unpredictability and inflation. The more orderly the industry is, the better, as people can buy and sell homes with a more carefree reliance on the economic indicators that change every day.
So what lies in the future? As the market has stabilized, it will probably begin to pick up again, perhaps in the next few months even.
Sales declined, inevitably, but as folks respond to the comfortable position the market is now in, sales will probably at least even out or increase in the next months and years. This will likely be more of a result of a balance between home buying and selling, rather than new construction however. In fact, in South Florida particularly (Sarasota), home construction has declined. This is mostly because of the torrential weather the state has faced during the past few years, most recently due to Hurricane Wilma.
Speaking of Hurricane Wilma, one major factor that can always threaten to throw the market on its side, is changing weather patterns. Following the detestation of Hurricane Katrina, the real estate industry, including Sarasota, in coastal regions is a bit on the insecure side. So keep on your toes if you want to keep tabs on the Sarasota real estate market!
