The residential real estate market in the Sarasota-Bradenton region, according to market analysts, began to overheat in late 2004 and 2005, and still continues to struggle because of the upsurge of speculative inventory created during that time frame. However, many say the positive news is that the market steadily reduced the level of finished vacant inventory during 2007.
The Sarasota market has seen a slight decrease in new home closings than other housing markets in the state, dropping only 14% since the peak that occurred in the second quarter of 2006, while the Tampa Bay market reported a 41% drop in closings from its first-quarter 2006. Two important demographics - retirees and foreign buyers, help to reduce the impact created by the lack of job creation, and helps to establish a more predictable level of demand.
Evaluating The Single-Family Home Closing For The Past Two Years
For the Sarasota-Bradenton area, the quarterly closings for single-family homes during the fourth quarter of 2007 tallied to 1,212 units, and represents a drop of 38.6% as compared to the 1,975 units closed during the fourth quarter of 2006. The annual closing rate was 6,492 units for the 12 months ending in December 2007, which analysts view is 13.6% less than the annual closing rate of 7,516 units tallied at the end of the fourth quarter of 2006.
Single-family home inventory, which is made up of homes undergoing construction, finished vacant units and model homes, totaled 3,890 units at the end of the fourth quarter of 2007, and represents a 7.2-month supply. The area's total housing inventory also fell by to 46.6%, as compared to the same period in 2006. The number of new homes under construction also dropped, from 2,382 units from the end of the fourth quarter of 2006 to only around 1,202 units at the end of 2007.
A Look At Lot Development Figures In This Area
Housing analysts note that the region's finished vacant inventory lessened by 31%, from 3,375 units at the end of the fourth quarter of 2006 to 2,329 units at the end of 2007. Vacant inventory also included second homes and investor homes that have not been occupied yet. A total of 684 lots were delivered to the Sarasota-Bradenton market during the forth quarter of 2007, as compared to the 2,960 lots delivered in the same period in 2006.
The inventory levels for vacant developed lots was placed at 36,967 units, which represents a drop of 3.6%, as compared to the 38,348 lots reported at the end of the same period in 2006. Housing market observers say that the inventory of vacant developed lots represents a 143.1-month supply, which is an increase of 75 months compared to the fourth quarter of 2006. While lot development in the region has slowed down considerably, lot delivery was still a bit higher than housing starts during the fourth quarter.
In light of the updated levels in both single-home closings and vacant lot inventory, the Sarasota-Bradenton region could be nearing the bottom of the market, however it will still continue to reduce inventory this year. Many regional housing analysts say that new housing starts would probably rise during the first or second quarter of the year, but will remain below new home closing levels.
Most agree that the Sarasota-Bradenton area is still a less expensive retirement haven as compared to areas like Naples, as retiring baby boomers will continue to increase demand, and whose numbers will continue to rise during the next five years.
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