Are we starting to see an adjustment in the real estate market, maybe, or are only some parts of it changing? One thing that is still very strong relative to the country as a whole are the cash offers being made.
No matter how you spin the sales statistics, which we’ll get to shortly, when it comes to having the edge, buyers with all-cash offers are still the top of the heap. There is a slight downturn in cash offers both nationally and locally, however, the percentage of cash sales is still staggering.
Because of this, buyers are teaming up with family members to consolidate funds for cash offers. Many of these sales are converted to mortgages or home equity loans after closing. Of course, you need to find the cash first and there are suddenly a number of companies that are funding the cash on behalf of the buyers and then taking a fee in the form of a percentage of the cash fronted at a later time when a loan can be put on the property. Some cash offer companies buy the house on behalf of the buyer and then sell it to the buyer. Others give buyers cash to make the purchase themselves.
About 25% of home sales in June were paid in cash according to the National Association of Realtors, near the highest level since 2014. Comparing the national to the local market, the Realtor Association of Sarasota and Manatee for June reported cash sales for single-family properties were about 39%, significantly higher than the national average. Cash condo sales for June in Manatee County were just about 55%, however, I don’t have a national “paid in cash” figure for condos.
So, let’s move on to the overall June sales statistics recorded by the Realtor Association of Sarasota and Manatee.
Single-family homes closed 22.3% fewer properties, the median sale price was $550,000, the same as last month, the percentage was up 37.5% from last year, and the average sale price was $690,524, up 19.8% from last year. The median time to contract is six days and a month’s supply of available properties is up 200% from last year, at 1.8 months. This is because there are 31.5% more new listings this June compared to last, adding to the available inventory.
Condo sales closed 23.6% fewer properties, the median sale price was $356,500, up 27.3%, and the average sale price was $441,868, up 33.2%. The median time to contract is seven days and a month’s supply of inventory is 1.5 months, up 200% from last year. In addition, there are 8.4% more new listings this month compared to June of last year, accounting for an increased monthly supply of condo inventory.
The Realtor Association of Sarasota and Manatee indicates that both Sarasota and Manatee counties are beginning to see more and more homes available for sale compared to last year. This trend will likely continue considering the record high prices and rising mortgage rates. Sellers will get serious about selling and buyers who can qualify for the higher rates will want to buy before the rates start going up again. Nevertheless, even a two-month supply of available properties is still far from the six-month inventory that was always considered a balanced market.
Cash trumps everything in real estate in every market – always has and always will. Keep an eye on the future and the possibility of a sea change to a more level real estate market.