January 2023 Real Estate Market Update

For Sarasota-Manatee Counties

It's a new year, and we’re here with your January 2023 Real Estate Market Update, the info you need to know when it comes to your real estate buying and selling needs! Let's review the figures from December of 2022 and assess how the year ended.

Closed Sales

Let's start with closed sales - closed sales dropped about 36% from this time last year (1,601 in December 2021 to 1,023 in December 2022). Remember, most of these drops will have a big change because we're comparing December of 2021 to December of 2022 because they're wildly different real estate markets. We're also going to look at what's happening month-over-month because that's going to give you a more realistic picture of what's happening. Month-over-month, we saw closed sales increase by about 15% (863 in November 2022 to 1,023 in December 2022) which shows that maybe the market has stabilized a little bit and it's picking back up which is great to see.

*Statistics from* *https://www.floridarealtors.org/*

Cash Sales

Next up, we've got cash sales - we saw cash sales drop about 34% from this time last year (612 in December 2021 to 402 in December 2022). But the thing we want to look at is month-over-month. What percentage of our sales are cash? In November, 37% of sales were cash and in December, 39% of sales were cash. So we saw an increase of cash, which shows some confidence in the market.

Median Sale Price

Year-over-year, we saw the median sale price increase by 12.4% ($450,000 in December 2021 to $506,000 in December 2022), but the thing to pay attention to here is how that is changing month-over-month. The percent change year-over-year is decreasing each month; we’re not seeing the massive increases that we were seeing month after month through 2022 and 2021 and we're seeing those prices start to stabilize. So it'll be interesting to pay attention to that in the next coming months to see if these prices stabilize more or if we’ll see any type of drop. Until inventory rises, we don't think we're going to see any significant price drops. Cash sales are still going strong, so we don't foresee anything too drastic.

Median Percent of Original List Price

This is a good number to pay attention to if you're a buyer in the market. This is based on the price of the home when it was originally listed to the price it sold at. What was the gap in that price? We saw the median percent of original list price go to 96.2% in December 2022 and that's pretty much stayed the same for the last few months. If it had a price reduction, don't take that into account; go look at the original list price to see if we're getting some deals out there.

So if you were a buyer that was sitting on the fence thinking “hey, I'm losing out to multiple offers”, now may be the time because we're seeing things go for under list price now (unless the home is priced correctly). There are a lot of homes that have been sitting on the market for a while, which is the number one sign that they're just not priced right.

Median Time to Contract

This is something we pay attention to because this is how quickly homes are going under contract. We saw that in December 2021, homes were going in seven days or less. So if you didn't see the home right away, you definitely weren't going to see it later because it was already gone. Now in December 2022, the median time to contract is 25 days; that includes some of those overpriced homes that are getting adjusted and going under contract and a little over three weeks is still relatively quick. So if there’s a really nice home, you should still go out and see it quickly, it's not going to last. But ultimately we've seen that rise, and it's started to stabilize there as well. We've seen those mid 20s for the last three months now, so we'll pay attention to that one as we keep going.

New Pending Sales

We finished off December 2022 with 806 new pending sales, just a little less than November 2022 with 890 new pending sales. So we're going to have to pay attention to this one to see how this moves forward. We should see a little bit of an increase in January and then going forward, some stabilization around that 1000 range. It’ll be interesting to see what happens there.

New Listings

We saw new listings drop a little bit from 1,247 in November 2022 to 1,121 in December 2022. November is normally a lower time and December is one of those times when listings drop off. We'll have to pay attention to what happens in January because without more listings/more homes coming on the market, inventory is going to stay depressed which will affect the median price and some of those other numbers. If there aren't a lot of homes to shop for, people grab what's on the shelf.

Inventory (Active Listings)

In Sarasota-Manatee Counties, we have about 3,437 homes for sale in December 2022, compared to 1,024 in December 2021. That’s a massive increase, but still not enough to put us in a median market. We’re still technically sitting in a seller's market with some other variables, but we'd like to see inventory either stabilize or start to rise a little bit.

In a balanced market, we'd like to see a 3-5 month supply of inventory, and that's about where we're at. We're at 2.8 right now, which means if all the homes sold and no other homes were listed, they would all be gone in less than three months. So that puts us still inside of a seller's market, but right on the edge.

A Message for Buyers and Sellers

Being in a seller’s market, but right on the edge makes it one of those markets where it's good for both sides. There's opportunity for buyers and there's opportunity for sellers. You just have to have the right agent in your corner who is:

Knowledgeable of the market
Familiar with pricing
Asking you questions about your future plans

When you're buying or selling, it matters what you plan on doing with the home. If you're going to buy a home and keep it forever, price is not as big of a factor because historically, real estate has always gone up. If you're buying a short-term home, then you have to be strategic in where you buy and what you pay. Just make sure you're working with the best agents!