Property prices in southwest Florida continue to rise, but at a slower pace than the state and nation.
Property prices in Sarasota-Manatee rose 3.6% year over year in July, followed by a 4.8% increase in Florida and 5.5% in the US, according to a report by the real estate database CoreLogic on Tuesday.
The two-county region ranked 130th for price growth among 403 US metros studied. However, the increase exceeded the annual profit of 2.8% recorded in June.
House prices have proven resilient during the coronavirus pandemic, although some expected price gains should slow down as the economy stalled. CoreLogic had previously forecast that the Sarasota-Manatee area had a 90% chance of falling prices over the next year.
However, the nationwide gains in July were the fastest in nearly two years. CoreLogic attributed the one-two to strong buying demand – aided by falling mortgage rates, which fell below 3% for the first time in July – and the continued tightening of inventory for sale has put upward pressure on real estate appreciation.
"Overall, despite the shock and awe of the pandemic, the real estate industry remains solid," said Frank Martell, President / CEO of CoreLogic. "A long period of record-low mortgage rates has opened the floodgates for a refinancing boom that is likely to last for several years. Additionally, buying demand for a temporary COVID-19-induced slip has increased due to the low rise in prices and avid millennial and investor buyers.
"Spurred on by strong demand and record-low mortgage rates, we expect more housing construction in 2021 and beyond, which should help support a healthy housing market for years to come," he said.
Sarasota-Manatee property prices are still rebounding from the Great Recession, 9.8% from their pre-bubble highs.
According to an earlier report by Florida Realtors, existing single-family homes in Sarasota-Manatee sold for an average of $ 340,000 in July, up 11.5% year over year. Condos traded for $ 235,500, up 12.1%.
Nationwide house prices are expected to rise 0.6% over the next 12 months. That's a rate of slowdown, but still more optimistic than it was two months ago when CoreLogic expected US prices to decline 6.4%. In parts of the country hardest hit by the pandemic, house prices could fall in the coming year. Higher unemployment could spur the stock of distressed sales as some homeowners are unable to make mortgage payments due to ongoing financial pressures, especially as government-mandated grace periods expire.
"Cheaper homes are in demand and have faster annual price growth than luxury homes," said Frank Nothaft, Chief Economist at CoreLogic. "First-time buyers and investors are actively looking for cheaper homes, and this segment of the real estate market is particularly scarce."