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There were 4781 homes for sale in Sarasota County at the end of January. Considering that during that month only 145 sold, one could say that it would take 33 months like January to sell all those homes. This is a common inventory measure used by Realtors.

 

But is this the right way of measuring how long a home for sale in Sarasota would take to sell? A better measure would be to take into consideration the total number of sales for the last 12 months, not just for the last month. Because 2708 Sarasota homes sold in the past 12 months, the expected time to sell all these homes would then be 21 months.

 

In my opinion, these numbers are too pessimistic. On average, sellers will be able to sell their homes in a shorter period of time. Why? Because these extremely long inventory periods are calculated on the basis of recent sales, which have been abnormally depressed since mid-2006. If and when sales return to a “normal” level, then the current inventory appears much more manageable.

 

But what is a “normal” level?

 

 

Looking back to historical sales, the period 2002-2003 appears to show consistent monthly sales averaging 400 single-family homes per month. After that, during 2004 and the first half of 2005, sales levels increased to 450 per month, only to fall below the trend during the second half of 2005 and 2006 to the current levels of just 234.

 

If we assume that the 2002-2003 level of 400 sales per month was a more “normal” market, then under “normal” conditions the current inventory of 4781 units would take 12 months to sell – that is, an average of 6 months on the market, which is a reasonable length of time.

 

The question, of course, is: when will sales return to “normal”?.

 

During most of 2006, prospective buyers were subject to relentless reporting of falling home prices. Why buy, if prices would be lower in a few months? Many prospective buyers, who wanted to buy, were either scared into waiting or decided to postpone their purchases hoping to get a better deal.

 

As this year starts, there are some indications that the psychology of buyers might be changing.  In fact, preliminary sales figures for February indicate that sales of Sarasota homes are higher than those of January, even though February has fewer days and has been one of the seasonally slowest months.

 

A change of psychology can also be brought about by recent media headlines suggesting that the Sarasota real estate market has found its bottom. Furthermore, interest-rate futures suggest that two more interest-rate cuts are likely this year. Supported by a benign interest-rate environment, the built-up demand from 2006 may well provide a “kick” to sales that might bring the pace of purchases closer to a “normal” level and thus help homeowners sell their properties.

 

When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise and knowledge to help you see where you stand when negotiating your real estate transaction, whether you are buying or selling a property. Our track record, added to the unsurpassed reputation of Michael Saunders & Company as the premier real estate company in Florida's Gulf Coast, give you the peace of mind you deserve. Alison and Raul have been named Best in Customer Satisfaction by an independent research company.

 

Call us today at 941-350-7904 for a consultation, and visit our website, www.sarasotaproperty.info, for monthly updates on the Sarasota real estate market.