A Market Expert Talks About Trends
In a recent special section the Sarasota Herald Tribune, columnist Chris Angermann interviewed me about how I see our housing market evolution. The article is attached in its entirety below.
As I have reported previously, with the peak selling season behind us we are cautious as we enter the shoulder/summer to not over-speculate that growth will remain at the same pace as we recently experienced however, I am confident that recovery will continue. One of the nuances of the Sarasota real estate market that my peers and I have had these past several months is that a great number of the buyers are new to Sarasota. Many are pre-retirement and still holding onto primary residents elsewhere but, they see incredible value and low interest rates creating a sense of urgency for them to buy here now before the opportunity is lost.
With an estimated 10,000 baby boomers reaching age 65 EVERY DAY for the next 20 years, the supply of potential buyers for Sarasota real estate almost seems endless. It’s no surprise to all of us already here that the region offers spectacular opportunities to enjoy an active lifestyle filled with performing arts, visual arts, one of the country’s greatest collections of dining establishments, myriad outdoor activities, incredible shopping and so much more – add to that our great prices, decent existing inventory and record new housing starts, I see no problem attracting our fair share of those aging adults and our region once again returning to a robust housing economy.
The Economic Development Corporation of Sarasota, Manatee’s partner organization, the many regional Chambers of Commerce and the other active groups are working diligently to attract new business and industry to the area, which will continue to reinforce our jobs market. The announcement of several business expansions and new industry moving here provides excellent prospects to “young” retirees looking for new professional opportunities. Maybe we’ll even become more successful in retaining more of our young home-grown talent, see them enjoy the opportunity to have fulfilling careers, raise their families here and invest in homes, helping to further contribute to a sustainable and strong Sarasota housing and overall economy!
“A Market Expert Talks About Trends”
Published: Saturday, June 2, 2012 Sarasota Herald Tribune Guide to the Real Estate Marketplace
A Realtor with Michael Saunders & Co. since 1982, Michael Moulton deals with luxury waterfront real estate. In the past decade, he has been involved in transactions exceeding $300 million. A student of the market, he keeps a close eye on trends and has earned the designation of Certified Residential Specialist (CRS), which is held by less than 4 percent of all Realtors, and also holds the Graduate, Realtors Institute (GRI) diploma from the National Association of Realtors. Correspondent Chris Angermann interviewed him in his Longboat Key office.
Q: What’s different about the real estate market than a year ago?
A: The activity we’re seeing is that the buyers are people that sold their property elsewhere — whether it it’s their main residence, because they want to retire here, or a vacation home … they don’t go to anymore. That wasn’t the case before.
Another dynamic we’ve seen in the last year or so: People who are looking around real estate here and say, “I can’t buy until I sell my current house,” perhaps seeing something they really like and may go home and take a lower price they otherwise would not have taken. They want to buy now when they think is a good value. I have done transactions with several people who are several years away from retirement but are taking advantage of the lower property values and low interest rates.
We certainly have what is considered a normal market — six months of inventory at most prices. The ratio of inventory to closed monthly sales is down from that, so you’re probably going to see a slight price increase of properties, say of under a half-million dollars.
Q: What about the luxury market?
A: For residences over $1 million, we probably have a couple of years of inventory. But the well-priced, remodeled or fairly new homes are the first ones to go, and people are finding it harder to get what they want with the bells and whistles they want, so we’re seeing the start of new construction again. The infill lots west of the Trail — Southside Village near the hospital — look at the construction that’s going on there.
Bird Key, where I live, is a perfect example — if there is so much great inventory out there, why is there so much construction going on? In several cases, it’s people moving up from an older residence to a newly built home. The prices for bayfront lots have gone down, as have construction costs, although they’re going up again.
Developers are starting to talk there again, too. There are some well-heeled people that have been sitting on land for a while, who feel that Sarasota may be right for some new high-end, high-rise condos downtown and on the islands. There are a certain number of buyers who want to live in something that never has been occupied, preferably a condominium as close as possible to their primary home — private garage, private foyer, spacious, three bedrooms — plus a home office, if they can have it.
Q: Who are these buyers?
A: Many come from Chicago and New York. But this past season there have also been a tremendous number from Canada, mainly Toronto. Their economy must be booming, because it seems like every other showing I have is to a Canadian.
The European business, while its part of our livelihood, is not big by comparison. The statistics are that the typical foreign purchases are around $300,000 — and a lot of those happen in the Orlando area. We also don’t have Far Easterners, Middle Easterners or Brazilians in the luxury market — the people that are buying art work, fancy wines and Bentleys. I don’t see them coming here. An occasional family at IMG, but that’s usually just temporary while their kids are in school there.
But if you’re a baby boomer who’s considering moving to Florida, Sarasota has to be on your radar screen as a place to check out. People are coming here now who don’t have a prior family connection — they just want to see it.
Several of my clients rented for a season before they decided to buy. There are so many baby boomers coming, we’re going to get our fair share.
Q: So the prognosis is good?
A: It all adds up to good news. I find that wherever I go, whether it’s golfing or to restaurants, everybody seems to have a sense that things are coming back. Just the fact that things are selling gives everyone a good feeling.