Q2 2022 Market Outlook

Market Outlook 2nd Quarter 2022 Sarasota & Manatee Counties

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Welcome On the pages that follow, we help you understand the housing market in Sarasota and Manatee counties. It is this snapshot into our immediate past that provides us an educated view into our future, combined with the perspective of the factors that influence our tomorrow. Our goal is to provide you insight and advice so you can make better decisions in your real estate investments. We encourage you to take a few minutes to digest the data and corresponding perspectives within. Real estate, and in particular luxury real estate, is our business. Please contact one of the REALTORS® at Premier Sotheby’s International Realty for a more detailed discussion about the market or an analysis of a specific property. Our associates are the best equipped, educated and skilled in the business. We are here to serve you.

Sarasota 50 Central Ave, Suite 110 Sarasota, FL 34236 941.364.4000

Longboat Key 517 Bay Isles Pkwy Longboat Key, FL 34228 941.383.2500

Lakewood Ranch 8141 Lakewood Main Street, Suite 101 Lakewood Ranch, FL 34202 941.907.9541

Venice 400 Barcelona Avenue Venice, FL 34285 941.412.3323

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Florida Outlook 2022 Continued growth, stronger than much of the U.S. with solid appreciation in several key markets.

•

Warm and sunny climate

•

Low taxation

•

High job growth

•

Positive business climate

•

Diversified population growth

•

Exceptional growth in the Luxury Market

Sarasota & Bradenton Once again, Sarasota is ranked the top place to retire according to U.S. News & World Report — April 7, 2022

WHAT IS “HOT” LOCALLY? Updated homes and condos in pristine condition at all price points are still seeing multiple offers with Sold prices at or above List price! Practically every region and price/product category within the two county areas saw high demand and price appreciation for exceptional product: downtown, waterfront, condos, singlefamily, older homes, suburban, ranch land and more.

Taking the top two spots: Single-Family Homes from $500,000 to $1 Mil experienced the biggest gains in unit sales. Up 43% (1st quarter — year over year) Condos over $4 Mil saw the greatest increase in average sales price. Up 46% (1st quarter — year over year)

WHAT IS “COOLING OFF” LOCALLY? Homes in less than pristine condition. Homes with mediocre locations or views. Overpriced homes.

We are seeing price resistance and increasing days on the market at all price points for homes that are less desirable. This is a change from just a few months ago when all homes were selling

for top dollar.

Provided by Premier Sotheby’s International Realty

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SUPPLY Single-Family Homes “For Sale” Sarasota & Manatee Counties - per Stellar MLS

A Full YEAR of stagnant inventory Units For Sale April 1, 2022

Supply

267

Under $500,000

1 week

Lowest we have ever seen

340

$500,000 to $1 Mil

7 weeks

Nominal increase

158

$1 Mil to $2.5 Mil

1.5 months

Same as last quarter

177

Above $2.5 mil

5.5 months

Significant increase

942

Combined totals

3 Weeks

Institutional buyers are purchasing homes under $500,000 at an unprecedented rate as they amass rental inventory for their firms. This, combined with continued demand from traditional buyers, results in a dramatic shortage in this segment for the average American.

The increased supply of luxury homes over $2.5 Million should cause increased days on the market and fewer multiple offers in the luxury segment as the year progresses.

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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DEMAND - Sold & Closed Single-Family Homes

2019

By Quarter - All Prices

2020

2021

2022

Why do we have four (4) consecutive quarters of declining sales?

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Simply not enough inventory (supply) to meet demand

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Many buyers are abandoning their search without making a purchase (Buyer fatigue)

Comparing the first quarter of each year evidences Q1 2021 was an anomaly. 2019, 2020 and 2022 are very similar in units sold.

These numbers do not fully reflect New Construction sales because builders do not record all sales in the MLS. Thus the actual number is closer to 4,000 units due to increased new home inventory.

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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DEMAND - Units Sold & Closed Single-Family Homes - 1st Quarter Comparison First Quarter Comparison Under $500,000

$500K to $1 Mil

$1 Mil to $2.5 Mil

Above $2.5 Mil

Combined Totals

Sold & Closed

2019

2589

2020

2748

6%

2021

3164

15%

2022

1949

-38%

2019

378

2020

505

34%

2021

934

85%

2022

1336

43%

2019

121

2020

122

1%

2021

332

172%

2022

302

-9%

2019

18

2020

20

11%

2021

86

330%

2022

97

13%

2019

3106

2020

3394

9%

2021

4516

33%

2022

3684

-18%

Dramatically reduced inventory resulted in fewer sales.

Strongest growth segment in terms of unit sales.

Supply was nearly identical to the same quarter a year early, thus sales were nearly identical also.

Supply increased, correspondingly sales increased.

Overall sales are down due to insufficient inventory for sale.

Secondarily we are seeing increasing pushback against overpriced homes and homes not in top condition.

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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Average Sold Price Single-Family Homes Sarasota & Manatee counties - per Stellar MLS

2019

2020

2021

Q1 2019

$395,685

Q1 2020

$410,070

4%

Q1 2021

$551,678

35%

Q1 2022

$678,421

23%

2022

Though phenomenal for sellers, it is unlikely the current rate of appreciation can be sustained much longer. All markets reach a point of price resistance.

We are seeing a combination of price resistance and buyer fatigue in recent weeks, indicating an easing of the buying frenzy even though demand remains incredibly strong.

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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CONDOMINIUM - New Projects Sarasota’s insatiable demand for condos continues to expand. Overall, the supply of condos is even more restricted than single-family homes because of the limited number of New Projects on the market. Resale condos throughout the region continue a sales surge, but the most undersupplied segment of our market is clearly the New Construction condominiums.

Collage on 5th — Rosemary District

Visually it may seem there are new condos everywhere

$1.3M to $1.5M

but that is largely due to their visibility being so much more obvious than single-family home construction.

The fact is Sarasota is very undersupplied in new condo offerings, thus the demand for resales also continues to grow.

There are several new downtown area projects coming to market in the coming months, but supply of the luxury segment will remain undersupplied for some time.

“Collage on 5th” & “Premier on Main” listed by Frank

Premier on Main — Downtown East

and Anita Lambert.

Starting at $1.195M

Zahrada 2 — SOLD OUT

SOLD OUT

SOLD OUT

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SUPPLY Condominiums & Townhomes “For Sale”

A Full YEAR of stagnant inventory

Units For Sale April 1, 2022 153

Supply

Under $500,000

2 weeks

Fewer units for sale

96

$500,000 to $1 Mil

1 month

Moderate increase in units for sale

66

$1 Mil to $2.5 Mil

2 months

Same number of units as prior year

42

Above $2.5 Mil

4 months

Slight increase in units for sale

357 Combined totals

2.5 Weeks of Supply

Units for sale is nearly identical to Q1 2021, but the mix has shifted to fewer low price units and more higher end units. The only segment showing significant increase in the “month’s supply” is the “Above $2.5M” due to luxury sellers capitalizing on the market while there are so few new construction alternatives.

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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DEMAND - Sold & Closed Condominiums & Townhomes

Demand is simply outstripping supply. In the past 12 months, the pace of sales equates to 565 sales per month. Yet, the current inventory for sale is only 357 units in the entire 2 county area, all price points combined, resulting in a current supply of about 2 weeks.

Condo sales are harder to track and analyze due to huge swings when new projects are completed.

Such is evidenced a year ago in the first half of 2021, when numerous projects were completed at a wide variety of price points.

But sales have slowed, even taking New Projects into consideration. The primary reason is the lack of available inventory for sale, which has been stagnant for a full year.

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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DEMAND - Sold & Closed Condominiums & Townhomes First Quarter Comparison Under $500,000

$500K to $1 Mil

$1 Mil to $2.5 Mil

Above $2.5 Mil

Combined Totals

Sold & Closed

2019

926

2020

1152

24%

2021

1702

48%

2022

1105

-35%

2019

120

2020

218

82%

2021

309

42%

2022

263

-15%

2019

32

2020

93

191%

2021

107

15%

2022

116

8%

2019

7

2020

9

29%

2021

84

833%

2022

25

-70%

2019

1085

2020

1472

36%

2021

2202

50%

2022

1509

-31%

Fewer condos available under $500,000 result in fewer sales.

With fewer new construction options, sales decreased even though there was a slight increase in resale inventory.

Sales growth similar to supply growth.

Supply of resales increased, but supply of New Construction decreased, resulting in a reduction of sales because luxury buyers often prefer new or updated “like new” resales.

Overall sales are down even though supply remains stagnant. This is largely due to older condos that are not updated attempting to command similar price points as new construction condos.

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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Average Sold Price Condominiums & Townhomes

Q1 2019

$325,721

Q1 2020

$384,157

18%

Q1 2021

$498,092

30%

Q1 2022

$515,076

3%

Similar to unit sales, the average price for condos varies widely as new construction projects complete. Consider the dramatic difference between currently PENDING SALES of Condos: Pending Units

Avg. Price

Avg. Price per square foot

NEW Construction

423

$1,266,891

$1,294

Resales

761

$564,210

$387

Provided by Premier Sotheby’s International Realty Data supplied is from the Stellar MLS and is deemed but not guaranteed to be 100% accurate

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Market Shift or continued Boom?

Overall, the market is still very strong. Demand has been nearly constant but a sizeable number of Buyers have been unable to secure a home due to the competitive landscape. This is especially true for Buyers who need financing. They have been at a huge disadvantage for the past year plus versus cash buyers.

2022 is shaping up to be different than 2021. We have witnessed a small market shift in the past 4 weeks.

Overall sales are constant, but the product mix has shifted. For the past year, Buyers have been willing to pay top dollar for nearly any property that came to market because there were so few choices. We still see far too few options to choose from, but Buyers have become more selective.

Today’s Buyers appear to be pushing back against overpriced homes that are not in stellar condition or that do not have a premium lot/view. As a result, those homes are not selling quickly. Consider that of all residential properties currently For Sale (Active) in the combined 2 county area: Days on the Market 14+ (plus) days

54%

30 + (plus) days

33%

60+ (plus) days

19%

This is significantly greater than what we saw last year when 72% of homes were selling in under 7 days.

Does this mean the market bubble has burst? NO. But it does mean many Sellers of less-than-perfect homes are asking too much for their homes (price resistance). Buyers are still willing to pay top dollar for that great location with an updated home in excellent condition. They are starting to discount or ignore the homes that don’t live up to the price being asked.

If you are a Seller, be honest with yourself on how your home compares to those bringing top dollar that are still selling overnight. This isn’t always easy because everybody believes their home is their castle, but the reality is, in a more normal market, not all homes can command top dollar and 60 days on market is not unusual.

We are not in a normal market and we still have a buyer backlog, but we have made one small shift towards a more normal market in our future. In the meantime, we will continue to see multiple offers and price appreciation on gorgeous high-demand properties.

Provided by Premier Sotheby’s International Realty Data from Stellar MLS and is deemed but not guaranteed to be 100% accurate.

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Everyone deserves the extraordinary, because luxury is not about price — rather it’s about an experience. And when it comes to real estate, experience matters.

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This material is based upon information from the Stellar MLS, which we consider to be reliable but not guaranteed to be accurate.

This offering is subject to errors, omissions, and changes without notice. If your property is listed with another real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. This material and its trademarks may not be republished or redistributed without prior written permission from Premier Sotheby’s International Realty.

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