Sarasota Real Estate Market Sets Records in 2015
Ilene Denton reports on red-hot neighborhoods in Sarasota’s record-setting real estate market.
Break out the history books. The year 2015 will go down as the Sarasota-Manatee real estate market’s busiest ever.
Industry insiders are using phrases like “shattering records” and “skyrocketing sales prices” to describe the frenetic pace of resales and new construction across the region. For the first time ever, the City of Sarasota processed 8,402 building permits in its fiscal year ending Sept. 30 (a whopping 1,200 more than in 2014), and the City of Venice issued a record-breaking 5,000-plus. Neal Communities reported in November that it was on track to sell 1,000 new homes in 2015, a 25 percent increase from the previous year and an all-time company high. In Sarasota County, residential resales topped 1,000 for each of six straight months, a never-before-seen phenomenon. (A slight dip in October still put us on track for a record-breaking year, say realtors.) And, on a micro-level, it was a history-making day in late September for John van Zandt, a realtor with Island Real Estate of Anna Maria. “It’s just now hitting me,” he wrote on Facebook. “I had three closings on Thursday. Never did that before.”
“We are on pace to have our best year ever in unit sales,” Stafford Starcher, president of the Realtor Association of Sarasota and Manatee and a realtor with Re/Max Alliance Group, said in late October. “Right now, it’s hot.”
The median number of days on the market for resales last September tells the story: 35 days for single-family homes in Sarasota County regardless of price range (54 days for condos); 46 days for single-family homes in Manatee County and 66 days for Manatee condos.
Anything priced under $300,000 is of enormous interest to potential buyers. “And if it’s a decent property, it’s more than likely to get multiple offers,” Starcher says. The million-plus range, too, is “the hottest it’s been in a long time,” he says, although he cautions that because there are fewer eligible people looking at those homes, days on the market will be longer. (Indeed, Sarasota continues to rank high—No. 19 in 2015—among U.S. cities with the highest number of active luxury home listings of $1 million and up, according to a study by Coldwell Banker Previews.)
Sale prices are still 25 percent to 30 percent off the height of the last real estate boom of 2004-2006. “I think it will be a while, and it should be a while until we get to that wild state of price increases,” says Starcher.
Still, property values are rising—enough to alleviate the number of underwater homeowners from a crazy recession high of 50 percent of all Florida residential mortgages to less than 12 percent through the third quarter of 2015, according to the state’s Office of Economic and Demographic Research.
With a little more money in their pockets, homeowners have a renewed sense of confidence, and that’s made for a seller’s market. “With the inventories out there right now in Sarasota County, if we had nothing else to come on the market we’d sell out of homes in 3.2 months, and in Manatee 3.6 months,” says Starcher.
Rising governmental impact fees on new construction will push up prices a bit in 2016, and the expectation that the Fed will raise interest rates is a bit of a gray cloud. But Starcher sees mainly blue sky. “I remain very optimistic and enthusiastic,” he says.
“That little increase in property values we’ve been seeing has put sellers in a whole new mindset of what they can do,” says Rhonda Gustitus of Keller Williams Realty in North Port.
So what are they doing? And where? Let’s tour some red-hot neighborhoods.
The state of the market on Longboat, Lido, Bird and Siesta keys follows a simple formula, says Barbara Ackerman of The Ackerman Group at Coldwell Banker: too little land available for new construction equals low inventory. “The proof in the pudding,” she says, “is that this year’s two new-construction [condo] projects on Longboat, Aria and Infinity, flew out the door.”
For single-family home sales, Bird Key “took the prize” in 2015, says Ackerman, because of its convenience to downtown; and for condo sales, Longboat Key was the winner. “Siesta Key not quite as much,” she says. “Siesta Key didn’t have the new construction that Longboat had, and it’s also a little more transient, with more rentals.”
Longboat, Lido and Bird keys are getting younger. “A lot of people who bought in the ’80s and ’90s are moving to the mainland and making room for the next generation,” Ackerman says. “These are people as young as their late 40s who are interested in Florida because they’re not seeing it as retirement anymore.
They’re seeing it as, ‘I can work anywhere and why not?’ The winters up North have helped us tremendously; and not only that, they’ve gotten more hurricanes than we do.”
Newcomers of every age are looking at the lifestyle. “They are very focused on resort, and a lot of people have become more focused on security and are looking for gated communities as well,” Ackerman says.
And most buyers of the single-family homes built in the 1980s and ’90s are tearing them down and building new, she says. “People will pay more for new construction because they don’t want to deal with the codes and insurance; your insurance is considerably less because it’s built to current codes.”
The biggest news out of Anna Maria came in December, when a vacant 1.1-acre Gulf-front lot broke all records by selling for $4.1 million to the CEO of Honeywell International. “It’s a great big lot capable of building a great big house,” says John van Zandt. “Anna Maria has been discovered in a big way.”
All three Anna Maria Island cities (Bradenton Beach and Holmes Beach are the other two) are in transition with a capital T. “There’s a lot of tearing down, and infill development is happening one house at a time,” van Zandt says. Property value in all three cities depends on proximity to the Gulf. “Although Anna Maria Island is a boater’s paradise with lots of canals that lead out to Tampa Bay and the Gulf, the tourist crowd wants the beach,” he says.
For the first time in 10 years, downtown Sarasota is brimming with new-condominium construction—The Vue, The Jewel, the DeMarcay at 88 South Palm, Sansara, One888 and more—and that brings renewed interest in downtown’s many older condos, too, says Candy Swick of Swick & Company.
“The people who have been sitting on the sidelines want bigger, newer,” she says, “and this new construction raises the bar for existing stock.” Many buildings are investing in significant upgrades—Watergate’s owners, right next door to The Ritz-Carlton, for example, recently voted a $60,000 assessment per unit to install hurricane-rated windows and doors. It didn’t deter buyers; a listing Swick had there in late fall sold in one day.
Swick says 2015 sale prices neared $1,000 per square foot, depending on the property. “That’s close to prices for direct beachfront,” she says. Resales on more mature, updated properties are in the $400 to $600 per square foot range. “And something downtown that has amenities but maybe needs a little lipstick and a haircut can run in the $200 to $400 range,” she says.
By mid-November, 164 downtown condos had sold in 2015, ranging from $4 million to $65,000 for a 700-square-foot apartment in Rosemary Park, and 104 additional sales were pending. Who’s buying? “There’s wonderful diversity: people who plan ahead who are going to retire, people from New England, the east coast, local people, many international people; it’s exciting,” says Swick.
West of Trail
The No. 1 principle in real estate is location, location, location, and nowhere does that continue to hold truer than in the West of Trail neighborhoods from Mound Street to Siesta Drive.
By mid-November, 77 homes had sold there in 2015 at an average price of $1,315,000, or $380 per square foot, says Jo Rutstein of Premier Sotheby’s International Realty. “Forty of those 77 homes, by far most of them not on the water, sold for over $1 million,” she says. And six sold for more than $4 million, including the highest sale of 2015 to date, the waterfront estate on Bay Point Drive that sold last summer for $6,825,000.
What makes West of Trail so appealing, says Rutstein, is its proximity to downtown restaurants and theaters, Siesta Beach, Sarasota Memorial Hospital, “and let’s be realistic, Southside School. You’re buying the community when you buy a home West of Trail.”
The diverse housing stock is the other big draw. “There are over 16 neighborhoods just in that vicinity, from Bay Point Park and Harbor Acres to Cherokee Park and on and on,” says Rutstein. “And there’s every single kind of home—from 1910 to 1925 to 1950 to 2015. You actually see the history of Sarasota [when you look at] West of Trail.”
Home builders, who’d been buying up the oldest housing stock the last couple of years as tear-downs, are finding themselves increasingly priced out of the market. They’ve started turning their attention to neighborhoods east of U.S. 41 from Bahia Vista to Webber, where they are tearing down older homes and building a new wave of modern homes. “East of Trail is the new West of Trail” is the rallying cry. “That neighborhood is in transition,” says Rutstein. “But you won’t see the same price point” as on the west side of 41.
The ever-mushrooming master-planned community of Lakewood Ranch celebrated its 20th anniversary in 2015 with sales of 388 new homes (as of Sept. 30)—a 6 percent increase over the previous year, says former longtime vice president of sales Jimmy Stewart. Two moderately priced new developments drove the increase: Neal Communities’ Indigo, with homes in the $200,000s, and Mattamy Homes’ Harmony, with villas and townhomes starting in the $180,000s. Last year, Stewart blamed a downward tick in sales on a lack of such affordable product.
Lots of activity, too, in Country Club East, where 70 homes sold for an average of $735,000-plus through the third quarter, and where new developments, such as WCI Communities’ 92-unit Clubside, are planned. And the ultra-luxury market is “performing well,” says Stewart. In The Lake Club, where the average sale price in 2015 was north of $1.5 million, more than 20 homes were under construction at year’s end.
There’s no end in sight to the mega-growth. Right now, Lakewood Ranch is selling homes in eight communities, and four more communities are under construction or on the drawing boards: Del Webb Lakewood Ranch, an active 55-plus neighborhood of 1,300 homes; the Pulte Group’s Mallory Park, with 436 homes; Savanna by Meritage, with 475 homes; and Arbor Grand by Standard Pacific with 305 homes.
Who’s joining the nearly 25,000 people who already live in Lakewood Ranch? Stewart says some 34 percent are Floridians (primarily relocating from Sarasota and Bradenton), 30 percent are Northeasterners, 19 percent Midwesterners, 13 percent Southerners, 4 percent Westerners and 1 percent Canadians.
Dorothy McKendry of Michael Saunders & Company has lived in Palmer Ranch for 15 years, “long enough to watch the market go up and down, and back up again,” she says. “It’s definitely back up,” she adds, as evidenced by the median 2015 purchase price of $497,000, versus $463,000 in 2014. “And there are very few bank-owned properties and no short sales at all; we’ve turned that corner here.”
New construction, barely in evidence last year, has returned to Palmer Ranch, and buyers are responding. By November, Taylor Morrison had sold 68 of the first 90 single-family lots it released in its Cobblestone development and was planning to release the remaining 90, McKendry says. The national developer is also building Arbor Lakes on 217 acres, and will introduce Legacy Estates, its gated community of 147 high-end single-family homes, sometime in 2016. DiVosta’s Sandhill Preserve, a single-family community it introduced in late 2014, is over 60 percent sold out, McKendry says, and another 300 new homes are planned for Hammock Preserve, also to be developed by DiVosta.
Resales are robust, too, among the 8,900 total residences in Palmer Ranch, although those at lower price points are scarce. “Everyone cringes when clients say they want [a home for] $300,000 in Palmer Ranch because you just can’t find it,” McKendry says, although she cited one recent sale, a small villa home in Mira Lago, that went for $315,000.
“People want these amenity-type locations that have at least a pool and a fitness center, and we have a lot of those in Palmer Ranch,” says McKendry. “It’s a great way for newcomers and seasonal residents to meet other people.”
Photo by Everett Dennison
Brace yourself: 6,000 new homes, mostly in master-planned communities that have been permitted in the northeast section of Venice from Laurel Road down to Border Road, are forecast to be built “in the next three, four or 10 years, depending on the market,” says Venice city manager Ed Lavallee.
Meanwhile, existing home sales are robust. “With low inventory and great interest rates, properties are moving very fast,” says Cindy Esselburn of Re/Max
Alliance Group and outgoing president of the Venice Board of Realtors. “It is definitely a sellers’ market.” Baby boomers are driving the market, Esselburn says, and they’re primarily choosing single-family homes or detached villas in communities that offer community pools, fitness centers, golf or tennis and other amenities.
Prices have risen, too: Through October, the average sale price was $262,161, more than $44,000 above the average sale price over the same time period in 2014. And Esselburn cautions that these numbers do not reflect homes sold outside of the MLS, such as builder sales of new products.
The Island of Venice, beloved for its historic, walkable shopping and restaurant district and proximity to the beach, is seeing new construction, too, with small boutique-style multifamily developments nearing completion or on the drawing boards, among them Tra Ponti Villagio, Island Court, Bella Milan and Villa Veneto.
Rhonda Gustitus of Keller Williams Realty, who’s been selling real estate in North Port, Sarasota’s southernmost—and fastest-growing—city, for 21 years, has one word for the current North Port market: “phenomenal.” And that’s because of one other key descriptor: “affordable.”
“We have agents driving to North Port from Sarasota, Fort Myers, Tampa to sell our homes because they can’t find anything affordable for their clients in their own neighborhoods,” she says.
The average North Port purchase price of $150,000 buys a newer 1,300- to 1,500-square-foot home with three bedrooms, two baths and a two-car garage, says Gustitus. “That’s the ideal home; that’s what most people are looking for.”
Near-retirees from the Northeast and Midwest are jumping in. “They are flying down and grabbing something now, arranging to rent it out, and going back up North,” she says. “They’ll be back down in two or three years [to live here themselves].”
Inventory here, too, is an issue, Gustitus says. But newer communities like Maronda Homes’ Villas at Charleston Park and Centex Homes’ Cypress Falls at The Woodlands are still building, “and there’s room for new construction,” she says.
More good news: Gustitus and her team sold their last short-sale property in mid-October. A few years ago, she had 35 or 40 short sales, she says.
And the mammoth 9,600-acre The Ranch in the West Villages (formerly the Thomas Ranch)—half of which is in the city, half in unincorporated Sarasota County—has started cranking up. Over the next three decades, 18,000 to 25,000 new homes and 3 million square feet of commercial and retail space are expected to be built there. Mattamy Homes, Canada’s largest home builder, is the controlling partner, says Tampa/Sarasota division president Ed Suchora. At press time, groundbreaking was slated for December on its first development there, the Preserve at West Villages, which will encompass 108 large-lot estate homes. Models will be open by early summer. “The outlook for that is grand,” says Gustitus. “It will be a whole new city like Lakewood Ranch.”
1/1/2016 AT 12:00AM