North Port-Sarasota-Bradenton Area Local Market Report, First Quarter 2017
Today's Market‌ Median Price (Red Line) and One-year Price Growth $300,000
30% 20%
$250,000
10% $200,000
0%
$150,000
-10% -20%
$100,000
-30% $50,000 $0
-40% 2008 Q1
Q3
2009 Q1
Q3
2010 Q1
Q3
2011 Q1
Q3
2012 Q1
Q3
2013 Q1
Q3
2014 Q1
Q3
2015 Q1
Q3
2016 Q1
Q3
2017 Q1
-50%
Local Price Trends Price Activity Current Median Home Price (2017 Q1) 1-year (4-quarter) Appreciation (2017 Q1) 3-year (12-quarter) Appreciation (2017 Q1)
Sarasota
U.S.
Local Trend
$266,400 4.5% 25.8%
$230,700 6.9% 20.8%
Prices continue to grow relative to last year
3-year (12-quarter) Housing Equity Gain*
$54,700
$39,700
7-year (28 quarters) Housing Equity Gain*
$98,800
$64,333
9-year (36 quarters) Housing Equity Gain*
$4,100
$32,167
Sarasota $424,100 $287,500 63%
U.S. $636,150 $636,150 not comparable
Gains in the last 3 years have extended the trend of positive price growth after the recession
*Note: Equity gain reflects price appreciation only
Conforming Loan Limit** FHA Loan Limit Local Median to Conforming Limit Ratio
Most buyers in this market have access to government-backed financing
Note: limits are current and include the changes made in December 2016.
Local NAR Leadership
The North Port-Sarasota-Bradenton market is part of region 5 in the NAR governance system, which includes all of Georgia, Florida, Alabama, Mississippi, Virgin Islands, and Puerto Rico. The 2017 NAR Regional Vice President representing region 5 is Sherri Meadows.
Benefits of Ownership: Total Equity Appreciation Total Equity Accrued to Owner by Year and Quarter of Purchase $150,000
$133,154
$100,000
$50,000
$15,673 $0
-$50,000
-$100,000 2004 Q1
2006 Q1
2008 Q1
2010 Q1
2012 Q1
2014 Q1
2016 Q1
Total Equity Gained** through 2017 Q1 from quarter in which home was of purchased Sarasota
U.S.
1-year (4-quarter)
$15,673
$18,582
3-year (12-quarter)*
$64,723
$48,743
5-year (20-quarter)*
$117,370
$83,996
7-year (28 quarters)*
$117,294
$76,553
9-year (36 quarters)*
$38,956
$46,748
If purchase in 2005, the national price peak
$7,940
$45,884
Price Activity
Local Trend Price appreciation and principle payments in the last 3 years have boosted total equity growth since the recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
Drivers of Local Supply and Demand‌ Local Economic Outlook
Sarasota
12-month Job Change (Apr)
8,500
12-month Job Change (Mar)
9,800
36-month Job Change (Apr)
35,000
U.S. Not Comparable Not Comparable Not Comparable
Current Unemployment Rate (Apr)
3.7%
4.4%
Year-ago Unemployment Rate
4.3%
5.0%
1-year (12 month) Job Growth Rate
2.9%
1.6%
Employment growth has eased, but remains positive
Unemployment in Sarasota is better than the national average and improving Local employment growth is strong compared to other markets
Share of Total Employment by Industry North Port-Sarasota-Bradenton Area Natural Resourc
U.S. Natural Resources/ #N/A #N/A Mining/Con struct Government #N/A #N/A 5.2% Other 15.4% Manufac 8.4% Services 3.9% Trade/Tr 18.6% Leisure & Hospitality Informa 1.9% 11.0% Natural R5.2%
23.1 Natural #N/A #N/A Government Resources/M 9.4% ining/Constru #N/A #N/A Other ct Manufacturin Services Manufacturing 5.4% 16.6 7.6% g 4.5% 5.4% Trade/Transporta 19.3% 58.8
Leisure & Information
7.6%
1.1%
3.5
4.8%
14.6
Prof. & Busine
14.4%
44
Educ. & Healt
17.7%
53.8
Hospitality 15.8% Financial Activ
15.8% Leisure & Hos Educ. & Other ServicesHealth 4.5%
Services Government 17.7% 9.4% #N/A #N/A
48.3 13.6 & Prof.
Business 28.5 Services 14.4%
Trade/Transp ortation/Utilit ies 19.3%
Financia5.7%
Professi14.1%
Manufacturi ng 8.4%
Trade/Trans portation/Uti lities 18.6%
Educatio15.8%
Information Financial 1.1% Activities 4.8%
Educational
Leisure 11.0% & Health Other S 3.9% Services
Information Financial 1.9%
15.8% Professional Governm 15.4% 100.0% Activities & Business 5.7% #N/A #N/A Services #N/A #N/A #N/A #N/A 14.1% 12-month Employment Change by Industry in the North Port-Sarasota-Bradenton Area (Mar - 2017) NA 0 Goods Producing Information Natural Resources/Mining/Construction -300 1,700 Financial Activities Natural Resources and Mining NA -1,400 Prof. & Business Services 2,700 NA Construction Educ. & Health Services
Manufacturing Service Providing Excluding Government Trade/Transportation/Utilities
State Economic Activity Index 12-month change (2017 - Apr) 36-month change (2017 - Apr)
92.4%
3,700
100
Leisure & Hospitality
NA
Other Services
300
Government
500
2,500
Florida
U.S.
3.6%
3.0%
13.3%
9.9%
The economy of Florida has outpaced the rest of the nation and improved modestly from last month's 3.24% change
New Housing Construction Local Fundamentals
Sarasota
U.S.
12-month Sum of 1-unit Building Permits through Apr 2017
5,900
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
3,209
not comparable
Single-Family Housing Permits (Apr 2017) 12-month sum vs. a year ago
7.7%
8.4%
7,000
The current level of construction is 83.9% above the long-term average Production above trend for an extended period of time could cause prices to moderate as inventory is built up. Construction is on the rise relative to last year, suggesting that the local inventory has stabilized
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
6,000 5,000 4,000 3,000 2,000 1,000 0
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%
State Total Foreclosure Rate vs. U.S Average (U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
Affordability Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
30% 25% 20% 15% 10% 5% 0% 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Sarasota
U.S.
Ratio for 2016
10.5%
15.2%
Ratio for 2017 Q1
11.5%
15.6%
Historically strong, but weaker than the fourth quarter of 2016
Historical Average
12.8%
19.2%
More affordable than most markets
Monthly Mortgage Payment to Income
Recent Trend - Local Mortgage Servicing Cost to Income (Historical Average Shown in Red Dashed Line)
16% 14% 12% 10% 8% 6% 4% 2% 0% 2015 Q2
2015 Q3
2015 Q4
2016 Q1
2016 Q2
2016 Q3
Median Home Price to Income
Sarasota
U.S.
Ratio for 2016 Ratio for 2017 Q1 Historical Average
1.9
2.8
2.0 1.9
2.7 2.7
2016 Q4
2017 Q1
The price-to-income ratio is high by historic standards and getting worse Affordable compared to most markets
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
The Mortgage Market 30-year Fixed Mortgage Rate and Treasury Bond Yield 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
280 240 200 160 120 80 40 0 2012 Q1
Q3
2013 Q1
Q3
2014 Q1
Spread (left axis)
Q3
2015 Q1
Q3
2016 Q1
Q3
2017 Q1
30-Year FRM (Right axis)
The first quarter was marked by rising mortgage rates. Short- and long- term U.S. interest rates continued to increase after November’s elections. The Fed raised the federal fund in March, bringing the target from 0.75 percent to 1.00 percent while Freddie Mac published that the average interest rate on a 30-year conventional home loan was 4.2 percent in Q1 2017 from 3.8 percent in Q4 2016. Intermediate-term yields also increased during the quarter, with the 10-year U.S. Treasury closing at 2.4 percent. Although the Fed does not directly set mortgage rates, its actions can affect the housing market. Mortgage rates tend to move with the government’s 10-year Treasury note, which serves as a benchmark for mortgage rates. However, homebuyers should bear in mind that mortgage rates still hover in the historically low range. Homebuyers have excellent purchasing power at these mortgage rates, and while it may make sense for fewer households to refinance, there are still some households that can save cash with a refinance. Looking ahead, despite the recent decline in April, interest rates are likely to head higher in 2017. NAR is forecasting the 30-year fixed rate mortgage to average 4.3 percent for 2017.
REALTOR速 Price Expectations REALTOR速 Price Expectations for the Next 12 Months (U.S. Average in Blue Dashed Line) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
Source: NAR REALTOR速 Price Expectations
Florida
U.S.
2017 - Apr
4.1%
4.2%
Prior 12 months
4.4%
3.8%
REALTORS速 expect weaker price growth in Florida than in the U.S. in the next 12 months. Their price expectations for the local market are more modest than a year ago.
Geographic Coverage for this Report The Sarasota area referred to in this report covers the geographic area of the North Port-Sarasota-Bradenton metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the following counties:
Manatee County and Sarasota County
More information on the OMB's geographic definitions can be found at https://obamawhitehouse.archives.gov/omb/bulletins_default/