October 2022 Market Update

for Sarasota-Manatee Counties

We’ve had a lot happening in the market in September and the beginning of October including Hurricane Ian. We’re going to see what effects that has on the market as a whole and go over the info you need to know when it comes to your buying and selling needs.

In this update, we’ll cover closed sales, homes paid for in cash, the surprising median sales price, median percentage of original list price received, median time to contract, new pending sales, new listings, and a few tips for buyers and sellers.

Closed Sales

Since October 2021, closed sales have dropped 41%. In September 2021, there were about 1,500 homes sold, whereas in September 2022 there were about 880 homes sold. We knew that number was going to go down because of inventory shortages, but Hurricane Ian came through at the end of the month so we’re really going to pay attention to October 2022 to see if that number rebounds a bit.

Homes Paid for in Cash

We like to see that stay about the same, so we’re looking at about 38% of homes being paid for in cash, which shows that there’s still some confidence there. With interest rates rising, we can see that that number may go up over the next coming months as homebuyers decide that it’s better to pay cash than pay for a 6.5-7% mortgage.

Median Sales Price

One of the numbers that was surprising this month was the median sales price. We like to look at this year-over-year to see what type of equity you would gain as a seller. We also like to look at this month-over-month.

Year-over-Year

In September 2021, we saw a median sales price of $420,000 and now in September 2022, that number jumped up to $505,000, which is an increase of about 20%. So if you bought your home a year ago, you saw a 20% return. That's also going to help prevent what people will call a “market crash” or the same things that happened in 2007-2008, where homeowners were over leveraged on their homes. We're going to see homeowners with a lot more equity, so they're going to have options before those foreclosures come, short sales, things like that. Homeowners can just sell their home outright.

Month-over-Month

Month-over-month, the median sales price bumps up from $500,000 to $505,000, which was surprising with the national news saying that things are slowing down and prices are dropping. We actually saw them increase just a little bit, which is why it’s important to pay attention to real estate on a hyper-local level because it’s market-specific.

If we have more people moving to Southwest Florida, we're not going to get the same type of market response as New York City for example, where people are moving away. So median sales price bumped up a little bit, but we’re going to pay attention to that going into the remainder of October and November to see if that stabilizes or drops a little bit.

Median Percentage of Original List Price Received

Median percentage of original list price received is at 96.2%, which is down 3.8% from September 2021. For about a year-and-a-half, this was frozen at 100%. So you list it and you got the price (give or take), but it averaged out at about list price.

So what's all this telling us? It’s telling us that some sellers are overpriced and they're having to drop the price down to get an offer. What we're really seeing is price reductions because that number is median percent of original list price, not the price that sellers are getting. It’s what they started at to what they end up with. For example, if somebody lists at $100,000 and it was overpriced, they dropped it to $96,500 and they got a full price offer.

As a seller, you want to make sure you're working with your agents to identify that right price the first time because if you're sitting on the market and you're not getting showings or traction, we still have a lot of activity. So if your home is not getting offers, 9 times out of 10 it comes down to price.

Median Time to Contract

If you want to look at the scary number, median time to contract went up 185%. This is what they’re going to show you the news; it's going to say that the time on market has tripled, doubled, quadrupled, however they want to spin the numbers. But in reality, it's gone from 7 days to 20 days year-over-year. This is still not a long time on market, they’re still moving quickly and your home is going under contract in less than three weeks. But we're also going to pay attention to see if that continues to increase or if it stabilizes and levels out.

New Pending Sales

New pending sales are down 32% with 1,375 a year ago to 928 in September 2022. We're going to pay attention to this one as well because we did lose a week or so with the storm, so afterwards that should bump back up a bit into the thousand-range.

New Listings

New listings are down 22% with 1,575 a year ago to 1,225 in September 2022. This is actually causing the market to stay moving (and moving quickly) because inventory isn't rising.

Normally in a market like this, you'd see more sellers coming on to capitalize on the gains that they've gotten over the last year. We saw that the median sales price went up 20%, so owners have equity they're trying to capture before they potentially lose out on it. But what we’re actually seeing right now is new listings dropping down a little bit, which is causing inventory to stay in that two month range.

Advice for Sellers

Active inventory is up about 140% with 1,300 a year ago to 3,200 in September 2022. This still keeps us in a seller's market because we only have about two months of inventory before we’d run out of homes to sell. Until we see that active inventory number hit 5,000-5,500 where it was in a balanced market, you’re still going to see things move and you're going to see things go for close to list price (if they're priced right).

One thing you will notice now that this inventory has gone up from 0.8 to 2.4 months, is that you have some competition. There isn't just one home in a neighborhood for sale anymore; now you have 4-6 homes that you're competing against. So as a seller, you’ll want to think about leaving this market instead of following it. Don't wait for your neighbor to put their home on the market for less than yours, which results in you chasing it. Lead the market with price and features and you’ll still get top dollar.

Advice for Buyers

As a buyer, if you haven't considered looking at things again or if you were waiting or hesitating, you’ll definitely want to think about exploring it again. Because as home inventory increases a little bit, you have some negotiating room. So if you needed closing cost assistance in the past, if you wanted to negotiate some repairs, etc., things are getting a bit more flexible for you too.

There's still tons of opportunity out there for buyers and sellers, you just need to make sure you're working with the right agent. They have the knowledge about the market, what's going on and how to position you correctly so you can always win.