While Sarasota seems to found its footing in the real estate market the past few months. Yes, pending sales are up 38 percent for January. not only are the numbers of units up, but so are prices. In January of 2012, a total of 963 contracts were signed. Single family homes have risen to a median price of $162,000. So, what is going to happen in 2012?
I think there are two scenarios:
1. There certainly seems to be some inertia gathering around the housing market and prospects for a strong 2012 seem to be in the making. The inventory is down, rates have remained low and Sarasota continues to get great publicity as a destination for people who are looking to invest or want to purchase a second home. I am predicting a strong year for our area.
2. We still have some pressure from foreclosures. If you look at the tax records that are available to realtor's, there are still a large number of foreclosures that are looming out in the market place. Another stress on the market will be people who want to short sale their primary residences in 2012. They may have been waiting to ride out the foreclosure process and drag out the proceedings, but after 2012, there will not be tax forgiveness given with regards to the 1099 someone might receive at the end of the year . The government enacted legislation in 2008 that would give relief to homeowners who might have had a large tax burden otherwise. The cap on the forgiveness is $2,000,000. Even at a 15% tax rate, a $2,000,000 mortgage forgiveness would save a homeowner $300,000 in taxes. These factors will cause many people to go ahead and put their homes on the market. This will keep home prices depressed, but I think we will see some relief as these short sales get absorbed into the market.
If the banks are smart (that will of course be questioned), they will slowly release their foreclosed properties back onto the market. I think that will be one of the keys as to whether Sarasota makes a strong comeback in 2012.
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