Real Estate Crisis: Prices Plummet By $100,000!

$100,000 price drops. Is it real that we've really lost $100,000 in value? Well, today I'm going to talk about what has happened in the past 12 months in the Sarasota-Manatee County housing market. And I'm also going to make predictions of what I think is going to happen in the next 12 months. Now, if you've been watching my videos, you know that I don't like to make predictions, but I'm going to make predictions for 2025 in this video. If we've not met yet, though, I'm Lisa McBride with Sarasota Neighborhood Experts. My team and I love helping so many of you buy, sell, invest in real estate. So give me a call today. Also, we do have relocation and neighborhood guides linked below in the description box. So if you want more information about relocating to our area or specific neighborhoods, we have the guides for you. Alright, let's dive into this crazy market because we knew that this was going to happen. When you go up this much, you know you're going to level off and come back down. So this has been a really crazy time in the housing industry. Now, I want to have a caveat here that even though we're having a correction and prices are coming down, one thing we're not having is a crashing market. So keep in mind this is not a major crash by any means. I know we can all watch the YouTube videos and I watch them too about how this is the worst housing market and on and on and that we are heading for a crash. Please keep in mind a correction and a crash are completely different things and right now we are in a correction. Unfortunately for many sellers, they did push the market trying to get as much as possible and I completely understand wanting to do this. Specifically, if you saw your neighbor sell their home a year ago for $800,000, $900,000, we would just automatically think our home is going to be worth a little bit more today than your neighbor's home a year ago and unfortunately that's not the case. So for home sellers, if they were adding $10,000, $20,000, $30,000 to what their neighbor's home sold for a year ago, these are the homes that we're starting to see drop prices by $50,000, $60,000, $70,000 and even $100,000. Remember, time on market is critical to what you're going to get on a home when you're selling it. So it is imperative to work with a professional that knows the market, knows the lead and lag times of what is happening in the market and can price and stage your home according to what's going on in today's market. So we've definitely lost value, but again, we knew this was going to happen. You can't double in values in two or three years and expect that to keep going up. So yes, we are seeing price drops of $100,000 on properties and I can show you examples of this time and time again. However, our average sell price and homes we're selling here in Sarasota Manatee County, well, they're going to be priced $600,000, $700,000, $800,000, $900,000 into the million dollar range, which we have a lot of luxury homes here and a lot of million plus homes. So a $100,000 price drop on a million dollar home is 10% or 15% on a $700,000, $800,000 home and that is again, this isn't a crashing market. This is a correcting market. Remember, we doubled in values. So to see this decline in 10% or 15% is to be expected and we really saw the start to slow down and happen at the end of 2022 and as we all know, in 2023, we had rising interest rates. So naturally, demand really slowed down, hitting its catalyst here in 2024 and it's not just our area that slowed down. Nationwide home sales are at some of the lowest amounts in 2024 that we've seen in over a decade. In the U.S. alone in 2024, there will be approximately 4 million homes sold. Now, typically on an average normal year, we're going to see between 5 and 5.5 million sold. In 2021 to 2022, there was over 6 million homes sold. So at 4 million, it's definitely a lot less. But specifically to our area here, there's a lot of reasons why I contribute the slowdown and the growth in inventory and one of them has to do with new construction. Our area has so much new construction. Not only do we have Lakewood Ranch, where 70% of all homes sold in Lakewood Ranch are brand new homes. We also have new areas in North River Ranch, which is just to the north of us in Parrish. We have Seaflower, which is just getting started in Bradenton, which will be much closer to Annemarie Island. We have Welland Park in Venice and we have lots of areas east of Interstate 75 in Nokomis and North Venice and East Sarasota. There's so much development here that naturally resellers of existing homes are competing with new construction and unfortunately, construction costs are going down, but they're not going to plummet by any means. Now, builders have that flexibility of being able to change the prices on their lots or offer incentives and or drop the prices if they see the demand is not there. Also, they can just slow down the whole building process in general so that they're not sitting on a lot of inventory if it's not the right time or they can predict the markets a little bit. So we definitely have a lot of inventory throughout Sarasota, Manatee counties to choose from. So buyers, this may be the best time to get out there and look at new construction or even existing homes as existing home sellers are going to have to price accordingly and competitively with new construction. So what do I think is going to happen in 2025? Well, in 2025, I think we're going to continue to see very similar to what we saw in 2024. I think it's still going to be a slower market. I do think we might even lose a little bit more value, maybe another 5%. The only way I could really see us maybe not softening any further is if interest rates were to drop into the 5% range and at the beginning of 2024, I was at conferences and watching things and doing all the things you're supposed to be doing and I heard so many people say that in 2024, we're going to see interest rates into the fives. Well, that never happened and I don't expect it to happen in 2025 either. So I don't think our demand for housing is going to grow exponentially, rising any of our values. And here specifically in Sarasota, Manatee counties, not only is new construction a major factor to play, but this year we had to contest with some hurricanes and this is going to impact our prices in my opinion in 2025. The reason being, well, first of all, we have a lot of people on the coastlines that are trying to decide if they're going to rebuild, stay, what they're going to do. We have more people a little bit fearful of living close to the water because of hurricanes. We have fear of rising insurance costs. We have a lot of uncertainty right now after the hurricanes and also as a community that people flock to during the winter months and we have a lot of sales during the winter with the people that are here visiting. This year is going to feel different partially because some of our snowbirds, some of our empty nesters, some of our second home visitors that will come in the winter months to escape the cold and look for properties here. They may not have those homes to live in that they typically would be renting on the coastline. There might be fewer people coming to visit this year. They may have had to make alternative plans for their winter retreat and that may just typically slow down our housing market in 2025. Now, I know there's plenty of people that will say, well, the traffic is still terrible and there's still people are all around and I do agree that we will always see a lot of people in our area during the winter months but there'll be a lot more consideration for moving inland and maybe not so coastal and I think there's going to be a little bit more uncertainty here in Sarasota-Manatee Counties in 2025 and that is why I don't think prices are going to increase in 2025. Now, I do think we might lose a little bit more value, level off, and then things will change again in 2026 and I can't predict that far out but that's my prediction for 2025. What are your thoughts? What do you think the market's going to do? And remember, we can never time the market when it's time to buy or sell. That's a personal decision and it's usually related to life events that we all experience, whether that's getting married, getting divorced, retiring, empty nest, kids off to college, whatever that may be. It's the reasons why we move is a personal decision and usually not regarding the market. So, let me know if I can be of any help and if you have any questions, give me a call today and as I said, I have relocation and neighborhood guides linked in the description box below. As always, I really appreciate you watching and until next time, take care.