The cute fixer-upper house that buyers were able to grab for $150,000 last year now costs closer to $190,000, and the price is still climbing.
“That nice, slightly older pool home for $200,000 is now $230,000 to $240,000,” says Realtor Charryl Youman. “In just one year, the values are up nearly 20 percent in the more affordable homes.
“And we just don’t have enough of those kinds of homes. Anyone with that kind of budget is seeing fierce competition, with new listings under $200,000 selling quickly, frequently with multiple offers — sometimes going for over list price,” she said.
While home prices in Southwest Florida may have cooled somewhat in recent months, local experts say they are not approaching pre-recession levels yet — and they have plenty of room to keep growing.
In September, the most recent month measured, the median sale price of an existing single-family home in the Sarasota-Manatee region was $259,200, an 8 percent increase over the year. Median prices in Charlotte County shot up 22 percent to a median $195,000.
That follows the double-digit gains posted in 2015, when home prices ended the year up 16 percent in Sarasota-Manatee and 19 percent in Charlotte.
“We are not anywhere near pre-recession highs, which was unhealthy and unsustainable,” said Xena Vallone, broker/owner at her Sarasota real estate agency. “We actually prefer to see a steady, sustainable increase in pricing because it is better in the long run.”
While prices for current single-family homes have eased somewhat, Re/Max Alliance Group co-owner Peter Crowley says that may be a temporary lull.
“Similar to last year, we saw a slow down leading into the fourth quarter, when looking month to month,” he said. “However, because of our limited overall supply, especially under $300,000, I believe you will still see price increases at or near double digits on an annual basis.
“I do believe prices have some room to increase, but at a more moderate rate going forward. If you normalize the data going back a few decades and look at a ‘normal’ rate of appreciation, we are right where we should be from a pricing standpoint,” he said.
Still room to rise?
Recent home prices in Florida remain 23 percent off their pre-recession peaks, according to real estate data provider CoreLogic.
Only Nevada’s difference of 31.4 percent is larger.
The parched stock of existing homes for sale is driving prices higher. While that inventory is nearly 20 percent higher than a year ago in Sarasota-Manatee, it remains well short of a balanced market, allowing sellers to seek higher prices for their properties.
“The inventory is up over this time last year, but is still not to what would be considered a normal level of a six-month supply,” said Linda Formella, president of the Realtor Association of Sarasota and Manatee. “In fact, the number of available single-family homes has fallen every month this year since the end of season. I do think we will see inventory improving over the next couple of months as sellers who are waiting for season put their homes on the market.”
Bidding wars for homes at certain prices levels have become commonplace here and in other housing markets across the country. According to the Zillow Group Consumer Housing Trends Report, only 46 percent of buyers get the first home on which they make an offer, and the home search takes an average of 4.2 months.
“Increasingly strong demand has been contributing to dwindling inventory stocks across the nation,” said Zillow chief economist Svenja Gudell. “Healthy demand for for-sale homes amidst low inventory has been driving the market, which is another sign that the housing market is recovering nicely. Buyers in the nation’s fastest moving markets can expect the search process to last a few months, as market conditions are often extremely competitive with homes selling for above asking price and receiving multiple offers. It’s definitely a seller’s market right now, with some homes being more expensive than ever.”
Locally, the most popular price point for buyers these days ranges between $200,000 and $300,000. Youman, an agent with Berkshire Hathaway HomeServices Florida Realty in Venice, says the $350,000 to $500,000 range has softened for current homes since buyers can buy new homes at those prices.
“Not everyone can afford new construction and, of course, those prices are continuing to climb as well, feels like nearly every week,” she said. “Actually, new construction may have reached its own ceiling, which is just starting to swing the pendulum back to resales.”
She said just two months ago, shoppers could buy a three-bedroom, two-bath home in Caribbean Village for under $300,000. Now, the least expensive home there is selling for over $350,000. Buyers can often find a nice resale, possibly with a pool, in a mature neighborhood with big trees for the same price.
“Buyers are circling back to that kind of thing,” she said. “There is a lot of pent up demand, so the buyers are there.”
Higher-priced properties sit on the market for a longer time with a slightly higher supply of homes, “leading to a more balanced opportunity for buyers,” Crowley said.
Median prices also are rising because fewer distressed properties — short sales and foreclosures — are selling for what are typically below-market values, Vallone noted. Sarasota-Manatee in September recorded 96 such sales, which accounted for 5.8 percent of all closings, compared with 200 sales at 12.4 percent of the total one year earlier, RASM reported.
“I believe prices can continue to climb, although at a more reasonable pace, which is a good thing,” Formella said. “A slower, more sustainable increase is good for the market and our economy.”
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