Poll: Where is the Sarasota Real Estate Market Now?
I would love to hear where you think the Sarasota real estate market is on this market cycle. Please make a comment. Are better times ahead? Are things going to get worse before they get better? Where do you think we are on this chart?
Since there are those debbie downers out there who just love to spread negative news and energy I am only going to post comments with valid email addresses. I promise not to post only the positive comments.
March 2011 Pending Sales Exceed Sales of March 2003, 2004 & 2005
The above chart shows the pending sales and closed transaction from 2003 to 2011. Pending sales are an indicator of future closed transactions. You can read more about this at my other blog post - Sarasota 2011 Pending Sales Outpaces Pending Sales of 2003, 2004 and 2005.
On a side note, if you have not heard the story and want an interesting read follow this link - Dutch Tulip Mania. It is generally considered the first recorded speculative bubble. The term "tulip mania" is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).
Love your blog. Great information. I think we are somewhere between depression and hope.
What Andy said
The Florida (Sarasota) housing market is a reflection of both the floundering economy and the absolute greed of real estate brokers and morgtgage companies. Fraudulent documenttion and misinformed investors have driven the housing market to the brink of disaster. The present used home inventory makes investing very promising. However, few people are willing or able to take the risk. While housing prices plummeted, taxes and HOAs made condos a poor investment even though interest rates have dramatically declined.
With all due respect, "encouraging" uninformed and financially unqualified individuals to purchase homes at the hetght of the market was so prevelant that to take action against those responsible would be impossible.
The low cost per square foot cost of existing proprties will make it difficult, if not impossible, for new home construction to rebound in the near future. Florida will always be a market that attracts investores, especially retirees.
The housing industry still lures those who need a place to provide for working families, but presently, retirees are having difficulty selling their properties in other parts of the country. If this appears to be a cynical observation....it's intended to be one.
Sadly, the florida real estate market is struggling because of a number of factors. Like any profession, the real estate industry has been labeled by the actions of a few individuals who put profit above professionalism. In addition, the economy and a surplus of properties added to the dilemma. I believe there are a tremendous amount of valuable properties being sold at a level that benefits buyers.
Thus far, I have been extremely fortunate in working with Florida agents who have represented their properties honestly and objectively. They have been a credit to the real estate industry.
I believe the days of misrepresenting a buyers ability to pay and representng properties that may well have been overinflated in value are in the past. I HONESTLY believe that there are a wide range of interesting and profitable investment properties, but like others, I am moving cautiously.
We have been watching the Sarasota market closely for over a year and are looking to buy a vacation home. We believe the market is somewhere between despondency and depression and will be making a purchase within the next few months.
As long time visitors to Sarasota (15 years) we continue to rent property versus purchase property. Reasons: While prices are down noticibly, they are still borderline for purchase vs rent analysis. The association, especially condos, fees are the most obscene in the country and when considering the association fees the decision to rent is easy. We sold multiple condos in Sarasota in early 1990's and since then have leased properties for several years---all things considered cheaper you see. I am afraid Real estate values have not reached the bottom yet, close, about another 10%.
I have long been following your blog. It is very enlightening and very useful when combined with all the facts. For example, the freeze on foreclosures is going to further negatively impact the market, but the increase in sales right now cannot be ignored.
I have been angry at what Bush and the flippers and the speculators did to the market for years now, and instinctively knew that interest only mortgages were a bad idea. I also knew that the banking industry was greedily looking out for themselves, and if the consumer was stupid enough to 'rent' their house with this type of mortgage, they deserved to burn. Sadly, they are now burning me along with them, while the bankers laugh all the way to...well, you know the rest.
At any rate, we are in year three of Bush's meltdown, with no end in sight. That said, I am actually optimistic. Not about MIami or Las Vegas or CA, they are toast. NYC, because of all the rich yuppies, will still do okay. The pendulum has swung the other way, and banks are putting on a good front with their cautious approach to mortgages. Housing prices have not gone as low as they will. Commercial prices haven't even begun their plunge. American jobs will never come back. Food and gasoline prices will go through the roof, because they CAN. Politicians will never look out for anyone other than themselves.
Why am I optimistic? Because as stupid as people were, they have now gotten their heads out of the sand and, appropriately, are suffering because of their duplicity and naivete. The banks and politicians will never suffer, of course, but the middle class will. Since they are the major purchasers of most housing -- the uber rich mansions will still sell -- this market will further decline and then rise. I give it another 10 years to come back.
Keep up the good work, Marc.
Depends on your personal money situation, if you got caught up in the bubble in the last couple of years in probably stinks. If you stayed common and didn't go crazy when prices were overblown nad have money in the bank you can go out now and get some great deals , so you might think its an awesome time to buy if you don't have to sell your house and can pick up a second home at a low price.
Good job Mark for keeping everyone up to speed on supply and demand numbers. The pending sales figures look good. Ultimately, supply and demand dictate where prices are going. We seem to be bottoming out. Which could certainly last for awhile.
It seems as if the government is realizing that they cannot keep spending money that they don't have. The solution is not to overtax the wealthy. The government does not have a revenue problem. It has a spending problem. Everything will look better when the government gets their financial house in order.
I think we are leaving DEPRESSION and moving to HOPE.
I think there is still another shoe to drop from washington..............
It really depends on what segment of the real estate market you are looking at. When it comes to new homes there will probably be a shortage in the near future as most builders have either gone out of business or quit building. The luxury market always lags the rest of the market because most of them don't have mortgages and they have the cash to wait. Homeowners on the lower end of the price scale generally have no choice but to sell their homes and/or give them back to the bank.
Different segments of the market are located at different points in the above wave. If you had to average the whole market together my guess is that we are at despondency.
I am looking to buy and own for a long time. If you do that you don't need to pick the precise bottom of the market.
The market in Sarasota I believe and hope is in the last 5-10% of its decline. This summer and fall should be about the bottom. One factor that will have great importance to all is QE2 coming to an end in Jun 2011. We will see how this effects not only housing market in Sarasota but also the stock market, commodities, inflation, and the price of the $. This June is a watershed economic time for the US, and the end of QE2 or a new QE3 will be a time that all should pay special attention to. Let us hope that Bernanke makes the correct decision for our country and for all of us...
As most real estate info availale from local realtors is very missleading, one should be very careful to just assume they know what they're talking about. THEY DON'T!
The reason sales pending are up the most over 5 years is because it takes 9 months to close a SHORT SALE deal, if it closes at all! This headline is a joke and only points to a huge problem, not a positive statistic. I don;t know why realtors can't be starightforward and honest instead of always leading people down the wrong road..........sigh..
Very impressive blog Marc - my first time visiting. I'm a long time broker associate in Northwest Florida and my knowledge of the Sarasota market is limited, but you all aren't really that far away from my Pensacola real estate market - both in terms of geography and in terms of economic factors. We all know it's tough to time the real estate market, just like it is to time the stock market. I showed beach condos to a potential client in 2004 who rang his hands over the prices and ultimately decided not to buy. He called me just a few days ago and said, "Wow, did I dodge a bullet!" Well, yeah maybe, but look at all the family memories and good times he missed over the past eight years. Our prices have rolled back to about 2002 levels, so he will save a bit if he does buy now - but not a ton! A wise mentor once said to me, the time to buy is when you can afford to buy and/or you need to buy. Our prognosticators tell us we hit the bottom of our market in the late fall of 2009, and then just as we began to see prices rise we experienced the Gulf oil spill. We are now seeing a rebound again in the Pensacola market, in both tourism and vacation property buying. If those making comments here wait to buy until they see their projected 5 to 10% fall they may - once again - miss the bottom.
We are past depression and accelerating towards hope.
Don't forget the new construction lead time. I wonder if there could be a pinch in inventory in certain market segments. High end condos? When was the last high end condo tower built? When will the next one be built? Will banks finance a condo tower in the near future? If so, what will the requirements be for closed contracts before financing is provided?
Ritz Carlton Tower Residence - A few months back, aoubt 14 units for sale out of about 80 in the building. 7 of those are now sold or pending sale. If this is the "smart money", is the smart money moving into an undervalued asset class?
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