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Home Sales and Price Indicators Stay Strong

special-reportHomes Sales and Price Indicators - The number of buyers who signed contracts to buy existing single-family homes and condominiums in Southwest Florida dropped in July from June, but remained ahead of last year's pace.

  • Real estate agents reported 1,473 new pending sales in Sarasota and Manatee counties in July. That was down about 5 percent from June, but was 2.4 percent higher than one year earlier.
  • Statewide, new pending sales for single-family homes rose 6.5 percent year-over-year, while new townhouse-condo pending sales increased 3.8 percent.
  • Nationally, slightly more Americans signed contracts to buy homes, with pending sales up for the sixth time in seven months.

Pending sales are considered a reliable barometer of future home purchases. There is typically a one- to two-month lag between a signed contract and a completed sale.

Pending sales in the region typically slow during the summer, and the June to July decrease was not as sharp as in past years, according to the Realtors Association of Sarasota and Manatee. Members say that could reflect greater staying power for the local market the rest of the year.

"Historically, we have seen August sales mirror the July numbers or rise slightly, so I'm looking forward to more good news as we come into late summer and early fall," said Stafford Starcher, president of the association. "Declining inventory of course remains a concern, but as homeowners look at the overall picture and gain some perspective, we could see more prospective sellers jump off the fence and into this hot market."

Pending sales rose across the country in July, rebounding after a slight dip in June.

The National Association of Realtors said its seasonally adjusted pending-home-sales index increased 0.5 percent to 110.9 last month. That marked a slight recovery from June, when the index fell to 110.4 after reaching 112.3 in May, a level last seen in 2006.

Home sales have improved this year with steady job growth combined with low mortgage rates. With the post-recession recovery now in its seventh year, more Americans have rebuilt their savings, increased their home equity and returned to the real estate market.

"Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing sales to maintain their recent elevated pace to close out the summer," said Lawrence Yun, NAR chief economist. "While demand and sales continue to be stronger than earlier this year, Realtors have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust."

Yun predicts that the national median sale price for existing single-family homes will rise 6.3 percent to $221,400 this year. In Sarasota-Manatee, single-family homes sold for a median of $231,250 in July, a 5.1 percent gain over the year.

Inventory shortages here and nationwide are putting pressure on home prices this year.

"In light of the recent volatility in the stock market, it's possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment," Yun said. "Overall, the prospects for ongoing strength in the housing market remain intact for now. The U.S. economy is growing -- albeit at a modest pace -- and the labor market continues to add jobs.

"Uncertainty in the equity markets -- even if the Fed raises short-term rates in September -- could stabilize long-term mortgage rates and preserve affordability for buyers," he added.

HeraldTribune Sept. 6/2015