JUNE NEWSLETTER 2013
Sales for May 2013 at 35 (SF-24, Con-7, Dup-3 & Lot-1) were well under May 2012 at 53 (SF-31, Con-16, Dup-3 & Lot-3). Of course, sales in May 2012 were the highest sales in any month since 2004. Sales for May 31, Y-T-D were 151 (SF-88, Con-45, Dup-9 & Lot-9) compared to May 31, Y-T-D at 192 (SF-110, Con-58, Dup-12 & Lot-12). Sales for the last 12 months at 390 (SF-223, Con-113, Dup-24 & Lot-30) were up 10% over sales for the previous 12 months at 370 (SF-209, Con-114, Dup-21 & Lot-26). Of the sales for the last 12 months the distressed properties (bank owned or short sales) were 41 (SF-19, Con-17, Dup-5 & Lot-0) only 10% of sales compared to the previous 12 months at 54 (SF-18, Con-29, Dup-5 & Lot-2) or 15% of the sales. Currently there are only 6 (SF-1, Con-4, Dup-1 & Lot-0) distressed properties or 2% of the inventory. Pended properties, (properties under contract) continue to grow each month and is currently at 84 (SF-39, Con-18, Dup-11 & Lot-16) up from 73 in April, 67 in March and 51 in February. This continues to bode well for future sales this year. Inventory on the island is at its lowest level since 2003, 2004 & 2005. It currently is at 287 (SF-138, Con-90, Dup-25 & Lot-34) down from 321 in May, 344 in April, 351 in March and 366 in February.
This month’s Frank, Larry & Al’s Great Buy’s haven’t changed from last month. I mentioned last month that 7314 Gulf Drive (LCC #7) went under contract and it closed at the end of the month for $982,000 (it was listed at $999,900). The best investment buy on the whole island continues to be 2916 Avenue E at $629,000. It has consistently done about $65K in gross annual rentals and pays all operating cost and just about all the mortgage with 20% down. There is not another property for sale on the island that can do the same. Frank and I have always advised buyers to buy the best location for the amount of money they want to spend because you can always improve the improvement but you can’t improve the location. It’s the location (or dirt) that increases in value but the improvement goes down in value unless you put more money into it. The good news is the land is 2/3rds to 3/4rs of your investment on the island or any waterfront property. With the inventory the lowest it’s been since 2003-2005 the good properties are few and we’re seeing a lot of multiple offers on those properties. Other than direct gulf front the best locations for investment property are west of gulf drive. Currently there are only 17 properties west of gulf drive. Eleven of them are greater than $ 1 million, three are $800K – $1 million and only three are less than $800K. You can see there are not very many great locations currently for sale.
In summary May 31, 2013 Y-T-D is still lagging behind the 2012 banner year but pended properties remain very high and that tells me demand is still very high. The fact that the inventory is at historic lows could slow sales volume because there won’t be enough on the market to satisfy demand. If you look at the inventory absorption chart you can see that in 2005 the inventory level dropped to 6-7 months of inventory based on the demand. You can see that we are currently at 7 months of inventory based on current demand which is the lowest it’s been since 2005. To give you an idea of the demand in this market a week ago a 2 bedroom, 1,100 sq ft, 1980’s interior, one level up home went on the market for $450K in the city of Anna Maria 5 blocks from the beach. In 5 days it had 6 offers and went under contract. As I mentioned in last month’s newsletter, the market has swung to a seller’s market. Sales in single family homes in 2012 were the highest ever recorded in MLS in the last 30 years and they continue to be robust in 2013. The macro market (Manatee and Sarasota Counties) has begun to turn around as well according to the Herald-Tribune “Taxable values also increased in every local city except Palmetto. The largest increase was 9% in Anna Maria, followed by 6% in Holmes Beach, 5% in North Port and 4% in the city of Sarasota”. Because the island is always well ahead of values on the mainland market the increase in mainland market values bodes well for the future values on the island.
See www.Alangalletto.com for detailed charts and facts.
Call me, Realtor ALAN GALLETTO 941.232.2216 of Island Real Estate.