Equilibrium
Yesterday’s and today’s Sarasota Herald Tribune points out what we have been saying for the last five months, units volume is down by approximately 1/3 and prices are down 20% from the market peak in mid 2005.
I will point out that local inventory levels have stabilized with approximately 52 weeks of supply in all price ranges. Further, according to David Seiders who is the chief economist at the National Association of Homebuilders, nationwide home sales have been consistent for the last four months indicating a stabilization of demand at approximately one million units per quarter.
Buyers should recognize the tremendous opportunity that exists right now as a large number of sellers are ready to consider all reasonable offers. This opportunity will start slipping away in the first quarter as supply starts to gradually decrease and more and more sellers decide to pull their property off the market until the market rebounds.
I see values rebounding in the third quarter of 2007. Sellers who cannot afford to sell and are in a position to wait things out should take their properties off the market. Sellers who need to sell now should instruct their agent to indicate to prospective purchasers that the seller will consider all serious offers and be prepared to accept a final sales price closer to Q4 2004 levels.
Ths Sarasota Herald Tribune’s article may be a bit dated, however its effect on the marketplace is gloom and doom.
Your comment that inventory levels have stabilized has me puzzled. I gather my own statistics, using MLS data. Today I ran month-end November — in Sarasota county (exclusively) inventory is up 22% over October and closings dropped 4%. With an absorption running in the low 20% range — your project of 52 weeks is what in line with my thoughts.
These facts dictate we must become more pro-active in finding buyers. Which ties back to internet global marketing.
I have been tracking inventory levels in the Sarasota area (Sarasota, Lakewood Ranch, Osprey, Nokomis and Bird Key, Lido Key, Longboat Key, Siesta Key and Casey Key) and have not seen a 22% rise in inventories. My numbers show about an 8% rise in homes and 10% in condos. You can see my inventory stats on my Sarasota Real Estate blog. Perhaps our numbers differ because you are including south county inventories.
I think it is pretty typical to see a rise in the number of homes and condos for sale this time of year because of seasonal factors. Residents know that there is more activity this time of year so a few of them put their property up for sale.
If you are looking for a place to buy I think there are some great opportunities out there. While scanning the MLS I have noticed some properties with asking prices close to the late 2004/early 2005 sales prices.