Agents see early signs of housing recovery from pandemic

Article Courtesy of  The Herald-Tribune

By John Hielscher
Published June 9, 2020


Realtors say buyer interest rising despite inventory shortage.

While home sales have cratered in the Sarasota-Manatee region during the coronavirus pandemic, agents say there are already some glimmers of recovery.

Buyers closed on 1,131 existing single-family homes in Sarasota-Manatee during a virus-infected April, down a painful 21% from last year. With that plunge, local home sales through the first four months of 2020 are up a scant 0.2%, according to the Florida Realtors group.

Condo sales were harder hit in the two-county area. The 498 units closed marked a 30% drop over the year, with year-to-date sales still 11% ahead of last year.

“For some, this pandemic caused a shift in their attention away from their real estate needs, yet it seems it was only for a short time, and nowhere near the extent we thought possible,” said David Clapp, president of the Realtor Association of Sarasota and Manatee. “The end of March to mid-April was the lowest period we experienced, and ever since then we’ve been watching a consistent week-over-week increase in new pending sales, which is positive as we move forward.”


Home prices in the two counties rose 8.3% over the year to a median $325,000. Through April, home prices have gained 6.8%.

Condos traded for $225,000 in April, up just 1.6%, but they have climbed 7.2% for the year.

Despite the 17% skid in sales nationwide, the National Association of Realtors recently upgraded its forecast for sales and prices for the rest of 2020.

“Given the surprising resiliency of the housing market in the midst of the pandemic, the outlook for the remainder of the year has been upgraded for both home sales and prices, with home sales to decline by only 11% in 2020 with the median home price projected to increase by 4%,” said NAR chief economist Lawrence Yun. “In the prior forecast, sales were expected to fall by 15% and there was no increase in home price.”

New pending sales — those under contract and a reliable barometer of future closed sales — were down 38% in Sarasota-Manatee during April, which would result in 603 fewer closings in the months ahead.
But Robert Goldman, an agent with Michael Saunders & Co. in Venice, said pending sales in May started to outpace last year’s levels.

“Twenty-five percent of all purchase contracts were new listings, homes listed in the past 20 days,” he said. “It speaks volumes to buyer appetite, scrambling for homes.”

As an example, he cites a home he listed in mid May. “Within the first three days there were 19 showings. We received three offers. It went under contract over list price,” he said.

New listings for existing homes were down by over 30% in both Sarasota and Manatee counties last month.

Some of the newer listings are impressive, such as the $4 million asking price for the four-bedroom, four-bath home at 1775 Cherokee Drive in Sarasota’s coveted Cherokee Park neighborhood. Designed by architect
Guy Peterson and built by Murray Homes, the residence features an open floor plan and walls of glass that connect with its natural Florida surroundings. Joel Schemmel of Premier Sotheby’s International Realty’s downtown Sarasota office has the listing.

“One thing that is for sure is that we still have an inventory problem,” Clapp said. “There is not enough inventory to meet the demand as the buyers continue to come back into the market, yet new listings are slower to come on the market than expected.”

Brad O’Connor, chief economist at Florida Realtors, said home values statewide are generally holding firm — a trend that’s in line with what basic economic theory would predict when there are offsetting declines in both demand and supply.

“Looking ahead to May, all indications are that we will continue to see stable prices but will see a further decline in closed sales,” O’Connor said. “New pending sales for April were down over 35.1% in the single-family category year-over-year, and they were down 56.6% in the condo and townhouse category. However, the silver lining is the majority of this drop occurred in the first couple weeks of the month. In each week of the second half of the April, we saw drastic improvement in the number of homes going under contract.

“The trajectory of this improvement has been strong enough, that preliminary data points to the possibility that we could see positive year-over-year growth in new pending sales in several markets across the state in May — particularly for single-family homes. What’s more, there’s a lot of current housing market data across the U.S. that points toward this being a national trend,” he said.

Pending home sales nationwide showed the biggest decline since NAR began tracking the data in 2001. Yun expects that April will be the lowest point for pending contracts, and May will be the bottom for closed sales.

“While coronavirus mitigation efforts have disrupted contract signings, the real estate industry is ‘hot’ in affordable price points with the wide prevalence of bidding wars for the limited inventory,” he said. “In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about home buying in the midst of the social distancing measures.”