Home prices resist post-pandemic decline, say local Realtors

Sarasota and its metropolitan statistical area that stretches from North Port to Bradenton frequently appears high on national lists, almost always in a “best places to …” type of category.

A new list produced by Realtor.com, though, places Sarasota at No. 5 of metros across the country where home prices are falling the fastest. While that may appeal to buyers looking for a “best place to find a home bargain,” local real estate experts say home sellers should take that ranking with a drop of salt water.

To begin with, the survey listed only one metro from each state, the article reads, “to ensure geographical diversity.”

The Florida population surge during the pandemic swelled prices to record levels across the state. The median single-family home price in the Sarasota market surpassed $500,000 for the first time in summer 2022. The Realtor.com story cited prices falling in the nation’s hottest COVID-era markets, along with rising mortgage interest rates, as a natural adjustment.

“Those markets that got the most juiced during the pandemic — where the prices really took off — are the markets where they’re now suffering the biggest declines because affordability has been the hardest there,” the article quotes Moody’s Analytics Chief Economist Mark Zandi. “I’d be surprised if we don’t have this same conversation a year from now and prices aren’t another 3% or 4% lower than where they are today,”

The report cites the median listing price in Sarasota at $549,900, or $305 per square foot, a decline of 4.7% in a year-over-year comparison.

Evan Danzig, a Realtor with Sarasota-based Michael Saunders & Co., said the report doesn’t paint an accurate portrait of the market here, or perhaps anywhere else.

“The analysts pick a random month, and merge the average price-per-foot for single family, townhome and condominium sales, comparing it to the same month one year prior,” Danzig said. “A more accurate interpretation of market activity would be provided by viewing this on an annual basis. The housing market in both Sarasota and Manatee counties actually reported year-over-year increases in median sale prices. While the number of closed sales across the board decreased during this time, the median sale price for single family homes in Sarasota County increased on a year-over-year basis, which is the polar opposite view that we are seeing from the realtor.com report.”

Even if they agreed that prices were falling here as Realtor.com reports, local real estate professionals are skeptical that Sarasota would be ranked No. 5 in the country. Selecting one market per state eliminates multiple markets in states that either gained value dramatically during the pandemic and are returning to pre-COVID activity, or those that are losing population and corresponding home values.

Slight upward trend

Residential real estate prices are subject to a rollercoaster of market forces — notably interest rates and inventory — but perception of value is driven by supply and demand, and demand for housing in the Sarasota metro is not abating. Inventory, though, is slowly returning to pre-pandemic levels, according to Premier Sotheby’s International Realty Managing Broker Craig Cerreta.

That rising inventory, and whatever impact it’s having on prices, is healthy, he said, while contradicting yet another Realtor.com article that ranked Sarasota No. 1 in the nation in rising inventory with a 128% increase year-over-year. 

While more inventory and higher interest rates are conditions that will impact prices, Cerreta said Sarasota remains in a growth phase and should be for the foreseeable future. 

“The author compared all residential inventory for sale in May 2022 vs. May 2023. It is unclear if it was pulled on May 1, May 31 or somewhere in between,” Cerreta said.  Does this matter? Yes. Inventory shifted significantly in May.

In an attempt to replicate the Realtor.com data set, Cerreta pulled MLS data from May 30, 2022 and May 14, 2023, and found that the inventory of all residential property was up 84.3%, well short of Realtor.com's 128%. Further, excluding all residential property types but single-family, inventory was up 37%.

“Yes that is a big uptick, but a comparable pre-COVID year like 2018 or 2019 would have seen roughly a 15% to 20% uptick for the same period due to seasonal trends,” Cerreta said. “Historically, if it hasn’t sold by Easter it will linger on the market until the summer buyers come back into play, and 2020 to 2022 were not normal years. They were COVID years, which defied normal patterns for everything in our society.”

Further skewing the data, in addition to single-family homes, townhomes, condos and villas, the Realtor.com story about inventory included half duplexes, condo hotels, dock-rackominiums (dry boat storage racks), farms, garage condos and mobile homes.

The latest MLS data released Thursday shows a three-month supply of single-family homes in Sarasota. Brian Tresidder, president of the Realtors Association of Sarasota Manatee, said that is still considered a sellers’ market. A balanced market is 5.5 months of supply. Anything higher is considered a buyers’ market.

That means that while prices aren’t skyrocketing as they did in 2021 and 2022, single-family home closing prices are still increasing at a modest trajectory. The May 2023 median sales price of $510,000 in May is up $15,000 over May 2022.

“In May of last year our median sales price was just under just under $500,000. From February 2023 on we’ve been at $495,000, $520,000 and $525,000, so we've seen a very slight but still upward trend in prices,” said Tresidder, sales manager for William Raveis real estate. “Some months are lower and some are a little higher, but when you look at the way it's trending, it's still a fairly slow increase in property values.”

Cerreta said more inventory is needed because people still want to move to the Sarasota area, and growth is a hedge against economic instability. 

“I lived in Atlanta for 32 years while its population increased from 1 million to nearly 4 million. We barely felt the recessions of the ’70s, ’80s and ’90s because we were growing,” Cerreta said. “Atlanta had economic growth while much of the country experienced economic contraction. Sarasota is still in a growth phase and should be for the foreseeable years. This increases the odds that Sarasota will weather the post-COVID global economic rollercoaster better than most regions.”