A deal or not a deal? That is the question
By Natalie Gutwein
One of the first questions people ask me when they walk into a home is “How long has it been on the market?” Recently, I seem to hear just as many people say, “That house has been on the market forever, I can get a deal on that!” But what is forever? 10 days? 30 days? 236 days?
And, what is a deal? Has our market slowed?
This month I decided to take a deep dive into the market statistics on Siesta Key to try and extrapolate what I’m seeing on a daily basis.
When every other state in the union closed and Florida remained open, it changed our market forever. All of a sudden, houses were selling before they hit the market or within a day and the value of our properties on Siesta Key seemed almost to double overnight. Market watchers and home shoppers very quickly forgot what the real estate market was like prior to the COVID-19 bump.
I started by comparing the number of active listings in 2019 to the number of active listings in 2023. Many people are under the mistaken impression that the Siesta Key market is saturated in single-family homes, but a quick glance at the table below shows a different scenario. In January, February and March of 2019, the inventory levels on Siesta Key were approximately twice what they were in those same months of 2023. The number of active listings for April through August 2023 have increased slightly, but are still significantly below the 2019 levels.
I’m sure if I asked five people how many days on the market was considered too many, I’d get five different answers.
For a seller, of course they’d prefer to sell their property on day one, but what is a realistic expectation? The 10-year high was 412 days on the market in December 2018! As outrageous as that sounds, the 10-year low was six days in July 2022.
While both those numbers seem to be outliers according to the statistics from the Stellar MLS database, in 2018 the average days on the market were 194 and 2019 wasn’t much better at 185.
The average started to decline in 2020 at 133 days, followed by 2021 at 56, and the 10-year low was 41 in 2022. The average has started to go back up and for the first eight months of 2023 we are averaging 70 days.
There’s a theory in investing called mean reversion. The concept is that for some financial investments (like a stock for example) there can be significant fluctuations in value, but eventually it will trend back to the mean. That seems to be what’s happening with home values here on Siesta Key. It happened after the housing market crash and it seems to be happening again.
Only time will tell. Stay sunny, Siesta.
(Natalie Gutwein is a licensed Realtor with Premier Sotheby’s International Realty’s Judie Berger Team and a member of the board of directors of the Siesta Key Association.)
(Data accurate as of Sept. 12, 2023 from Stellar MLS.)