Sarasota, Florida Market Update

As the summer winds down, we continue to see some weakness in the Sarasota real estate market as well as other markets around the country. August and September is typically a slow time of year so I don’t expect to see any dramatic changes in sales or inventory figures in the short term. However, I would not be surprised to see an increase in the number of properties for sale in November and December as many sellers want their homes on the market for the busy winter months. 

The large supply of property for sale, sub-prime mortgage fears and the decrease in property prices has created an overall uneasiness among buyers. While some view this as a great time to purchase, a large number of potential buyers are sitting on the fence waiting for the perceived market bottom. Their natural fear in a declining market is that the property they purchase today will be worth less in the future. There seems to be pent up demand in the market. When the fence sitters determine that the market has bottomed many of them will become buyers. 

On a positive note inventory levels have decreased slightly. Further declines in supplies with constant or increased demand will ultimately lead to a balanced market.  

On the national front, the Federal Open Market Committee approved a 50-basis-point decrease in the discount rate to 5-1/4 percent on September 18^th. 

Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction. This move is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time. Let’s hope it helps with home buyer confidence as well.