Home inventory continues to be tight in Manatee

cschelle@bradenton.comApril 25, 2013 

MANATEE -- Home sales in Manatee County increased more than 26 percent in March compared with the previous month, and the numbers could be better if there were more homes available to buy, reports indicated Wednesday.

"I think we would have even more sales if the inventory wasn't quite as tight," said Tom Heatherman, spokesman for Michael Saunders and Co. "I think that's why we've seen nationally a slight dropoff from last month."

In Manatee, 783 homes out the 2,664 for sale had closed and 1,005 sales were pending, according to TrendGraphix, a market trend report for Southwest Florida commissioned by Michael Saunders. Eight homes in Manatee sold for more than $1 million in March, which is a 20 percent drop compared with February.

The Manatee, Sarasota and Charlotte county region combined for the highest number of pending home sales in history with 3,088 in March. The region's 2,283 home sales

were the highest in March for seven years.

Nationally, existing-home sales declined in March, according to other data released this week, signaling a pause in the market as potential sellers were reluctant to put their homes on the market.

The National Association of Realtors said sales of existing homes fell 0.6 percent in March to a seasonally adjusted annual rate of 4.92 million.

But in Manatee, new home construction fueled sales as builders are coming out of the doldrums and ramping up construction across the region.

"We're seeing a lot more new homes coming into the pipeline, especially in Manatee County where much of the new home growth has been clustered for years," Heatherman said.

The U.S. Department of Commerce reported the seasonally adjusted annual rate of new-home sales rose 1.5 percent to 417,000 in March from 411,000 in February.

Economists polled by MarketWatch had expected the rate to rise to 421,000 in March.

With near-record-low interest rates continuing to support affordability, sales were 18.5 percent higher than during the same period last year, and economists expect the housing market to continue to gain momentum this year. There's room to grow: Despite last month's gains, the sales rate remains far below a peak of almost 1.4 million in 2005, though that bubble level is far higher than economists say is healthy.

"High affordability and low interest rates continue to support the ongoing housing sector recovery, but we continue to note that improvement in the housing sector remains quite gradual," said Gennadiy Goldberg, a strategist at TD Securities.

Low U.S. home inventories are constraining sales activity, according to NAR. The existing home supply available for sale has remained under 2 million since October, and decreased 17 percent over the past year. A large gain in April inventories are expected as the buying season heats up.

Returning to a balanced market is going to take time, Heatherman said. Manatee County has 3.4 months of available inventory, based on March's rate of closed sales, while the inventory of available property is 2.7 months based on the rate of pending sales. Those numbers signal the lowest inventory of available properties since July 2005, according to the report. Inventories shorter than six months are typically classified as a seller's market. Once home builders find skilled laborers to hire again after many left elsewhere for jobs, builders can start construction, giving way to new homes and prompting existing homeowners to sell, Heatherman said.

"Once you get new homes in the pipeline and sellers of existing homes are ready to sell, you're ready to mitigate this shortage of properties," Heatherman said.

National median prices hit $184,300 in March, up 11.8 percent from the same month in 2011, the largest year-over-year price growth since November 2005. Low inventories are supporting prices, and the median price has benefited from less distressed home activity, the NAR said.

Deanna Atkinson, president of the Manatee Association of Realtors, expects prices to increase slowly.

"Homes are selling closer to their list price," Atkinson said. "Buyers need to make good offers and realize there are a lot of buyers out there because there aren't a lot of properties, so it's important to make your first offer your best offer."

The national report is the latest data signaling a housing market that has grown substantially over the past year, supported by near-record-low interest rates and rising prices. But head winds remain from high unemployment and tight credit standards. For instance, higher standards are affecting young workers with student debt.

"First-time buyers are struggling to get into the market," said Lawrence Yun, NAR chief economist.

-- MarketWatch reports contributed to this story.

Charles Schelle, business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck

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