| Sarasota Herald-Tribune
Despite the shock of the coronavirus pandemic, home prices continue to climb in Southwest Florida.
But that rate of growth is lagging behind the gains seen in Florida and nationwide.
Home prices in the Sarasota-Manatee region rose 4.8% over the year in August, trailing increases of 5.3% in Florida and 5.9% throughout the U.S., according to a report on Tuesday from real estate database CoreLogic.
The two-county region ranked 159th lowest for price growth among the 403 U.S. metros studied.
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While some expected home price gains to stall during the pandemic, they have continued to show resilience. CoreLogic had earlier projected that the Sarasota-Manatee region faced a 90% chance of falling prices over the next year.
But the tight inventory of local homes for sale, combined with record low mortgage rates, are helping drive prices up.
The August increase in local home prices accelerated from the 3.9% annual growth recorded in July.
The price gains nationwide were the fastest in more than two years.
“Consumers who have not been as financially impacted by the ongoing economic pressures are taking advantage of low mortgage rates to either break into the market, upgrade their living situations or purchase second homes and investment properties,” said Frank Martell, president/CEO of CoreLogic. “With heightened activity putting a strain on the current for-sale inventory, strong demand should help spur new homebuilding activity.”
Consumers’ home-purchasing power has remained strong with mortgage rates remaining at historic lows. But the inventory of for-sale homes had continued to shrink, down by 33% in the Sarasota-Manatee region and by 17% nationwide. That creates upward pressure on home price growth as buyers compete for the limited supply of homes.
“The imbalance between homebuyer demand and for-sale inventory is particularly acute for lower-priced homes,” said Frank Nothaft, chief economist at CoreLogic. “Because of this imbalance, homes priced more than 25% below the median were up 8.6% in price over the last year, compared with the 5.9% price increase for all homes.”
Prices paid for single-family homes set new highs this summer in the Sarasota-Manatee area as buyers snapped up properties at a fast pace last month.
The median price for a re-sale home was $340,000 in August, the same as the record set in July that topped the prior high of $325,000 in April, according to an earlier report from the Realtor Association of Sarasota and Manatee.
After several steep drops as buyers were spooked during the early days of the coronavirus pandemic, sales have accelerated in recent months. Buyers closed on 1,580 homes in August, an 11% increase over the year.
CoreLogic says Sarasota-Manatee home prices are still climbing back from the Great Recession, now off 8.8% from their pre-bubble peaks. That’s the 28th largest margin of peak-to-current among the 403 metros studied.
Home price growth is forecast to cool off into 2021 as more new and existing homes are put up for sale, and elevated unemployment saps buyer demand. CoreLogic says prices will start to downshift early next year, with gains slowing to just 0.2% by August and many locations experiencing a decline in prices.
August home price gains
Region Monthly Annual
Sarasota-Manatee 0.9% 4.8%
Florida 0.5% 5.3%
U.S. 1.0% 5.9%