In today’s video I am standing in Phillippi Creek – Sarasota’s largest freshwater estuary – a 7.6 mile creek that has a snook hatchery and is popular for recreational fishing.
Snook are a tropical estuary fish which live in brackish waters and are sometimes known as sergeant fish. All snook caught here must be released back into the water and their population is managed sustainably.
A Competitive & Desirable Market = Frustration for Some
For those looking to move to Sarasota and perhaps enjoy the fishing and other elements of our wonderful water lifestyle, it can be a challenging time with lots of competition in some parts of the market.
Recently on Facebook, one of my wife’s friends was lamenting the fact they are having a difficult time buying property in Sarasota with so many bidders in the market. This is true – at some price points in the market competition is fierce – but not in all segments.
Luxury Market Bucking the Trend
In the luxury market, which I define as those properties listed for $1M and more, sales decreased by approximately 15% from the 1st quarter 2014. In addition there are 22-23 months of inventory which is quite a lot.
I am surprised, as I would have expected an increase in sales from the same quarter last year. Sales were low in Q1 2014 (although they rebounded sharply during the second quarter). It will be interesting to see if the pattern holds true this year as well, and if what we’re seeing is a slowing down in the luxury sector, or if things bounce back in Q2 as they did last year.
How is the Rest of the Market Performing?
From the first quarter a year ago, total sales are up about 1.6%. This is a good indicator of steady growth, and that the market is healthy.
The distressed market is about 2.7% smaller than a year ago, again indicating an improvement in the Sarasota real estate market’s overall health. It is currently a fraction above one in five homes in the Sarasota market.
So Where are the Bidding Wars Happening?
So what about our multiple bidder marketplace? For the segment of the real estate market under $200k there is only about two months of inventory, and for the segment between $200-500k there is five months of inventory.
Both situations can lead to multiple bidders on any property, as six months of inventory is considered a market in balance. Less inventory means more competition for what there is. See my article on supply and demand for a further explanation of how this works.
The price appreciation, and lack of inventory, while frustrating to buyers in this segment (and it does not apply evenly to all neighborhoods), will eventually help bring more properties to the market since at least one in four properties still have negative equity in Florida.
Next Steps if You’re Buying
As I always say, and it’s particularly true if you’re competing in the competitive segments: do your research thoroughly, engage an excellent buyer’s agent to help you, and be ready to jump when you see the property that ticks most of your boxes. If you’re at the luxury end of the market you have the time and leverage to secure yourself some excellent value, or to cut a deal.
