Real Estate in Sarasota Florida
September 18, 2016
Thinking of buying real estate in Sarasota Florida?
What does the Sarasota Real Estate Market hold for 2016?
Here's a recap of the 2015 real estate market in Sarasota and Manatee counties and, perhaps, what to look forward to in 2016:
To read reports from Realtor associations and local media, the Sarasota real estate market moved in 2015 at a "frenzied pace" with an increase in sales in Sarasota and Manatee counties, combined, of 6.7%.
The consensus is that record sales were being driven by the perceived "stronger economy" coupled with pent up demand from not only current retirees but future ones as well, according to the Sarasota Herald Tribune article
Prices are increasing in the range of double digits in the two county market of Sarasota and Manatee.
In the single family house market the median price in 2015 rose 16.4% to $253,650.
Also in 2015, the condo market saw price increases of 15.5% to a median price of $200,000, which is a hot price point in both single family homes and condos.
Anything below that price flies off the shelf fast if it's in decent shape.
The main factor driving up prices is the law of supply and demand as at the end of 2015 there was only a 3.8% - 3.9% supply of single family homes in the dual market measure, lower by 9% from 2014, as compared to a normal, or balanced market which is considered a 6 month supply.
Local Realtors said they expected more of the same in 2016 because they anticipate that interest rates will stay low in 2016 thus keeping sales strong.
Read more on the 2015 year end report and expectations for 2016 here.
Real Estate in Sarasota Florida
On the Flip Side....
At mid-year 2016, agents in the local market were reporting somewhat of a "cooling off."
And, also at mid-year 2016 sales were DOWN compared to year earlier figures, however prices were UP.
Prices continue to be driven by a supply/demand imbalance in the marketplace
especially in the $150,000 and under price bracket, where there is a definite lack of supply.
...Real Estate expert Jack McCabe of Deerfield Beach, Florida, as late as August 2015, was pondering the thought, "Florida could be headed for another housing slide."
Also, among the sales numbers and "frenzied" market of 2015, how many of those sales were flippers or for rentals?
Caution: When real estate stories return to the front page of the local paper, as the one referenced above from January, 2016 did, and the words "frenzied" and "record sales and prices" return to people's lips and brokers and agents are ecstatic, it makes one wonder just how long it will continue until another bubble forms and breaks. Then who's left holding the bag again?
Just some contrarian things to think about!
Is the next real estate bubble already underway? Here's an article that answers that question with facts and figures.
Recent History of Hedge Funds involvement in the
Sarasota Real Estate Marketplace
One thing that affected the local market in recent years is the fact that several Wall Street Hedge Funds came into the local market in 2013 buying up single family homes in bulk for their portfolios with the goal of turning them into rental properties; also prematurely raising rents above normal market rates.
What these Hedge Funds also did in 2013 was over pay the current market price for some of these homes they bought in bulk; in some cases as much as 30% - 40% over market valuations.
A July, 2015 newspaper article stated that the Hedge Funds had begun to start unloading (selling) the properties they bought here in 2013-14 because they had reached their profit targets in price appreciation.