Low supply and high demand continue to drive housing prices upward

High demand and low supply continue to raise housing prices in the region, according to the latest figures released by the My Florida Regional Multiple Listing Service.

In Sarasota County, the median price of a single family home rose 7.2% in July 2017 compared to July 2016. Manatee County saw a similar increase, rising 7.1% during that same time.

Condo median prices rose 4.5% in Sarasota County, while they fell 10.9% in Manatee County for the same period.

The increases are in large part due to a strong demand following the post-recession low, combined with the subsequent rebound in the economy. Inventory has shown an increase year-over-year, but has been trending lower since the peak in February of this year, according to a release from the Realtor Association of Sarasota and Manatee.

“Median prices have been rising but, it is driven by supply and demand, not artificial factors as seen in 2005 and 2006,” said Xena Vallone, President of the Realtor Association of Sarasota and Manatee, in a statement. “The increase began in 2011 and has continued at a gradual, sustainable rate.”

A report released Aug. 24 said that last year at July month-end, there were 6,687 properties for sale in the two-county area. By the end of February, the level had increased to 8,557. At the end of June 2016, there were 7,182 properties on the market.

The month’s supply of inventory, the number of months it would take to deplete current inventory at the recent sales rate, peaked in March with levels inching toward a balanced market. However, like inventory, this figure has been steadily decreasing since then.

In Manatee County, there was a 4.2 month supply of single family homes for sale, while Sarasota sits at a 4.1 month supply. Sarasota condos are at a 4.6 month supply and Manatee condos are at a 4.1 month supply.

This rise in prices stems in large part from the dwindling supply in housing inventory of foreclosed and short sale homes.

Foreclosures and short sales, also known as distressed sales, have continued to fall as the economy has improved. Only 4% of all sales in July this year were distressed sales, compared to 5.3% in the same period last year.

“At the peak of the downturn, nearly half the sales were distressed. Traditionally, distressed sales account for sales between 2 and 3%,” Vallone said.