After back-to-back double-digit yearly growth coming out of the pandemic, real estate prices in Sarasota-Manatee will round out the year mostly flat.
The most recent statistics available from the Realtors Association of Sarasota and Manatee reported the median single-family home sold for $495,000 in November while the median in 2022 was $500,000, a decrease of 1%.
On the year, prices remain up 1% even though the number of homes for sale has climbed by more than 1,300 active listings, with about 4,800 single-family homes currently for sale in the two-county region.
The number of single-family homes for sale at the end of 2021 sat at just 1,024, according to RASM statistics.
One of the bedrock principles in economics is that as supply increases price should go down, as long as demand remains the same.
The Sarasota-Manatee housing market has not reacted as economic textbooks would predict.
The stickiness of home prices comes even as the Federal Reserve has raised interest rates 11 times since March 2022, with mortgage rates near 8% last month — the highest experienced by homebuyers in about 20 years.
Rising interest rates should also decrease demand, lowering prices as the cost to borrow money increases. But that doesn’t appear to be the case in the local real estate market either, according to statistics maintained by RASM.
The RASM statistics show that through the first 11 months of 2023, closed sales are up 0.5%, indicating a slight uptick in demand compared to 2022.
Robert Goldman, a local Realtor with Michael Saunders & Company, said the 2021 and 2022 real estate markets were fueled by a once-in-a-lifetime event, pointing to COVID lockdowns across the country as well as the many people who accelerated retirement during that period of uncertainty.
Goldman said the stubbornness of local pricing has a lot to do with continued demand for a growing area.
“It is a remarkable thing when you consider how high (mortgage) rates went up,” he said, about 2023’s flat price increase.
While the runaway home prices experienced in 2021 and 2022 seem to be over, Goldman noted that 2024 should be a good year for homeowners, given FED Chairman Jerome Powell indicated in mid-December the nation’s central bank would cut rates three times next year.
Goldman said because of the elevated interest rates, there could be a lot of “pent-up demand” from buyers who were priced out of the market because of the higher rates.
As rates come down, those buyers will come back to the market and prices will likely increase, he said.
“Once rates stabilize, homebuyers and sellers will adjust to the new norm and prices will begin to rise,” he said.
Roger Pettingell, a waterfront luxury specialist with Coldwell Banker Realty, said he has sold about $110 million worth of real estate, with another $40 million currently pending, this year.
However, he was credited with a sales volume of $200 million in 2022, the highest of any Realtor in the area ever.
The luxury market remains strong, he said, pointing to several sales above $10 million, including a record $11.5 million sale on Bird Key earlier in December.
Pettingell has lived in the region for decades and experienced the growth of the luxury market through the years.
He said he views recent projects like St. Regis Residences on Longboat Key and luxury condo towers in downtown Sarasota as good signs for the future of local real estate owners.
“That just shows the confidence and comfort in the Sarasota area,” he said about the luxury projects. “Developers see us as not just a viable market, but one that is growing.”
He said even property further and further from the water has been demanding higher and higher prices. He said when the University Town Center Mall first opened, he doubted its viability, but has been proven wrong.
“I was absolutely wrong and I couldn’t be happier,” he said. “It’s exciting to live in a community that is growing and not in decline.”
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