The Lersch Group's Blog

Pending sales soar to 981 in April 2009; sales top 500 mark for
first time in 11 months

The number of properties reported pending skyrocketed to 981 in April 2009 in the
Sarasota real estate market, the highest since the boom years of local real estate in the
2003-2005 period and topping the previous month by 21 percent. Overall sales climbed
over the 500 level – the first time since June 2008 – and the median sale price for both
single family and condominiums rose above the March 2009 figure. This continued a
recent upward trend for prices, which could mean the market doldrums have finally
subsided.

The overall sales level of 505 was the highest since June 2008, and close to the 557 sales
reported in April 2008. Of those sales, 367 were single family homes, while 138 were
condominiums – higher than the March figures of 353 and 128, respectively.

The good news also extended to pending sales, which once again rose in April 2009 to

981. In March 2009, pending sales topped 800 for the first time in three years. The total
of 981 in April 2009 was 21 percent higher than the 817 reported in March 2009, and 31
percent higher than the 756 pending sales reported last year (in April 2008).
According to statistics from the Mid-Florida Regional MLS for members of the Sarasota
Association of Realtors®, 778 single family homes and 203 condominiums went under
contract in April 2009, compared to only 515 homes and 241 condos in April 2008.

Pending sales have now exceeded the 500 level for the 16th consecutive month, and have
trended steadily upward all year. The statistic is a strong indicator for the next two or
three months of sales activity, when many of these pendings will become closed sales.
Pending sales reflect contracts executed by buyers and sellers during the month. The
numbers indicate a continuing steady, strong pattern, and reflect clear buyer interest in
the Sarasota market as the nation appears to be emerging from a lengthy recession.

“Last month we saw a lot of major positive signs in our local real estate market,” said
2009 SAR President Bill Geller. “The fact that sales went up, while prices also rose, is an
indicator that healthy conditions are returning. We also saw overall inventory drop to the


lowest level of the year. Pending sales were almost at the 1,000 level –all very good news
that shows we have many, many buyers in the marketplace looking for good deals.”

Geller once again emphasized the importance of the recently enacted first-time
homebuyers’ tax credit of $8,000, which has boosted sales this year. Those who meet
eligibility requirements and purchase a home this year prior to Dec. 1, 2009 are eligible
for a tax credit of up to $8,000, and unlike the 2008 tax credit, this one does not have to
be repaid. Across the nation, this has led to a surge in first-time buyers, and Sarasota has
mirrored the national trend.

The median sale price for single family homes rose to $160,000 in April 2009 from
$152,125 in March 2009 – a 5.2 percent increase. The median sales price for
condominiums rose to $182,750 in April 2009 from $166,750 in March 2009 – a 9.6
percent increase. While the figures have started to climb, they are still much lower than
April 2008, primarily due to the higher number of short sales and foreclosures, which
have pulled down the median prices from last year’s level of $285,000 for single family
and $277,000 for condominiums.

The median price of all single family homes sold in the last 12 months was $199,000,
compared to a median of $242,000 for the 12 months ending in April 2008. For
condominiums sold in the last 12 months, the median sales price was $256,000,
compared to last year’s figure of $315,000. *

The absorption rate of properties on the market continues to drop for both single family
homes and condominiums, as inventories continue to decline. Absorption rate is the
number of months it would take to sell the entire remaining listed inventory in a
particular category, based upon the sales for that particular month.

For April 2009, the absorption rate for single family homes stood at 15.2 months,
compared to 17.1 months the previous month and 24.7 months in April 2008. For
condominiums, the absorption rate was at 19.2 months in April, compared to 21.2 months
in the previous month, and much lower than the 34.1 months reported in April 2008.

The upside of Florida real estate:

15 market positives

Let’s take a look at some of the opportunities for today and the future of Florida’s real estate market.

1. Great prices. Statewide, the existing-home median sales price was $161,200 in the fourth quarter of 2008; a year earlier, it was $216,600 for a decrease of 26 percent.

2. The time is right. Home sales volumes are rising again – a clear signal that today’s “buyers market” may be changing soon. In fourth quarter 2008, statewide sales of existing single-family homes were up 13 percent compared to the same period last year, according to FAR statistics.

3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is still plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don’t wait too long.

4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer’s financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize.

5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The U.S. Housing and Economic Recovery Act of 2009 includes an $8,000 tax credit for first-time buyers. President Obama’s 2009 economic stimulus package also identifies and offers incentives to help home buyers with mortgages. Talk to a local mortgage lender about state and federal incentive programs.

How to get the $8,000 credit.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010 economists forecast that Florida will be the third-most-populated state in the country. Florida’s population is expected to swell about 75 percent by 2030. Florida has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.

7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida’s population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida’s Bureau of Economic and Business Research. That’s a lot of new buyers coming into the market.

8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State’s mild climate and outdoor amenities continue to make Florida a top retirement destination.

9. Business-friendly state. Florida has always been a business-friendly state – no state income taxes, plus incentives from local municipalities encourage businesses to set up shop here. Even with the current economic downturn nationwide, Florida leaders continue to keep business needs in the forefront of planning for the state's future. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its “Best Performing Cities Index 2008,” which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida’s business climate ranked fourth among executives and sixth overall on “Site Selection” magazine’s 2008 Top State Business Climate rankings.

10. Positive investment outlook. Every quarter, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the third quarter 2008 survey, the investment outlook for various types of Florida properties remains steady. “People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest,” said Dr. Wayne Archer, director. “We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in.”

11. Homeownership has value. Realtors believe – and research supports that belief – that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth, both for the individual homeowner and for homeowners as a group.

12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.

13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and more likely to graduate high school. They’re also shown to have a higher lifetime annual income.

14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.

15. An unsurpassed lifestyle. Finally, let’s not forget the things that brought people to Florida in the first place, and will continue to attract them – beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It’s no wonder that Florida’s combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put Florida in the top three of Harris Poll’s “Most Desirable Places to Live” survey. Why It's a Great Time To Buy Real Estate in Florida!
Pricing and Inventory: This is an ideal time for buyers to find a Florida dream home. Inventory is plentiful throughout the state and today’s lower prices offer true bargains for purchasers at all price levels.

Call me today at 941-812-2788 or email michelelerschabr@gmail.com for more information!