Alison & Raul Elizalde

Sarasota Realtors

Alison and Raul Elizalde understand the Sarasota real estate market like nobody else. Their unique understanding comes from experience, specialized research, and deep community involvement. Their commitment to client service earned them the prestigious 5-Star Award given to the best real estate agents in Sarasota. Click here to learn more about Alison and Raul.

 

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In my November 2006 newsletter (Listing Price vs. Selling Price, November 2006 ) I looked at a common measure of the market: the ratio of Selling Price to Listing Price (SP/LP), which is reported to be around 90% for single family homes in Sarasota. The November article explained that the number is somewhat misleading, because the ratio is defined on the basis of the last listing price before a property goes under contract. Any previous price reductions are ignored.

 

A better measure is the ratio of Selling Price to Original Listing Price (SP/OLP). Using this ratio reveals a clearer picture of the market. As prices weaken, reductions become more common and the ratio SP/OLP decreases. Also, even without intervening price reductions, sellers become more willing to take low offers and settle for less.

 

 

In November I showed how the ratio had been in a steady decline for the last two years. Today, four months later, it seems that for homes under $1,000,000, price reductions have eased a bit and are now at around 88% from the original listing price, after hitting a low of 85%. Luxury homes in Sarasota, however, have been in a bit of a rollercoaster. After an improvement in December and January, closing prices on these high-end properties dipped again to a low of close to 80% of the original listing price. Some rebound seems to have happened in the first few days of April, but it is still too early to call it a bottom.

 

All this emphasizes that the market is still strongly on the buyers’ side. Sellers have not yet made a clear break from the weak 2006 market and have responded to large inventory levels with further price reductions.

 

 

It is interesting to note that the inventory of homes for sale in Sarasota under $1mm has declined 5% since last November, while the inventory of homes over $1mm has increased 19% in the same period. This might help explain the relatively worse performance of luxury homes compared to that of their lower-priced counterparts.

 

So is it “Time 2 Buy”? A situation might be developing where sellers are getting to desperate levels and want to unload their properties at almost any price. This might be a mirror to the environment of two years ago, when buyers were getting desperate and wanted to buy properties at almost any price.

 

It is difficult to catch major a price turn in any asset class by just looking at indicators and tables. But psychology often reveals those turning points. This happens when people on either side (buyers or sellers) start throwing caution to the wind and take any price to establish their positions. This is not to say that sellers are currently willing to give away their properties, but the worsening mood has allowed some buyers to purchase homes at true bargain levels. This seller behavior might be the clearest indication yet that the bottom is near.

 

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.