Big December probably doesn't herald high home prices

MANATEE -- Single family home sales made a big rebound in Manatee and Sarasota counties in December, snapping back from a November that was about the worst month of 2014 for the local residential real estate market.

Total existing home closings for the two counties during the last month of the year totaled 1,112, up from 910 in November. The numbers also showed an uptick from the same month in 2013, when 1,065 homes sold, according to the Multiple Listing Service. The sales performance marked the best December for the market during the past five years. It was also the hottest month of closings in 2014 for Manatee County, beating out the previous May peak with 553 homes sold.

The local trend mirrored similar market behavior statewide. Florida single family home sales jumped 26 percent month-over-month to 22,414.

Local real estate professionals attributed the slow November to several factors, including a drop in sales due to the approach of year-end holidays and what they saw as a lack of "move-in ready" properties. A surge in closings before the end of the year was expected.

"A lot of people wanted to close in December," said Pam Ali, managing broker for the Bradenton office of Michael Saunders & Co. "A lot of people wanted to be in their homes for the holidays."

Another sales driver was likely the county's homestead exemption. Greg Owens, broker at the Keller Williams on the Water in Bradenton, said the Dec. 31 deadline to avoid paying the higher property taxes on non-homesteaded properties was an incentive to buy by year's end.

"We tell all our buyers that if you don't close by Dec. 31, you can't apply for your homestead exemption," he said.

Even with the surge in sales, the prices paid for homes remained largely stable. In Manatee County, the median December sales price of $235,000

was identical to November. Sarasota County buyers paid $195,000 at the median, up slightly from November but about the same as October. Sellers in both counties received an average of about 94 percent of the asking prices for their homes.

Statewide, prices hit a five-year median high of $185,000, up 6.9 percent from the same time in 2013.

December's elevated sales set the two-county area up for a spring in which buyers may be competing for a relatively small number of available homes. With a little more than 4,700 homes listed for sale between Manatee and Sarasota counties during the month, the turn of the year leaves the area with one of its lowest levels of inventory in years.

With new homebuilders generally projecting to bring most of their 2015 product online in the third and fourth quarters, Owens said the best-maintained homes will sell quickly in a tight market.

"If it's a decent home it's moving fast," he said.

Still, Owens and Ali said they expect price increases in 2015 to be relatively small. At the statistical level, Ali said the biggest price driver will be the dwindling inventory of foreclosures and other distressed home sales. Foreclosed homes sold at a rate of 25 percent to 30 percent higher in December than the year before in Manatee-Sarasota. With those homes off the market, she said there will be fewer to compete with traditional sales.

Between January and December, the median home price in Manatee County rose 7.5 percent.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.