How Does the Sarasota Market Look for 2011? Where’s the Value to be Found in the Market Right Now?

Dovetailing from last month’s analysis of the sales numbers, it is clear the Sarasota real estate market is transitioning. What does that mean?

I feel it’s most pertinent to share with buyers right now that there is demand, i.e. competition, in the marketplace. Just to provide an example: I just sold a listing on St Armands Circle. In addition to the dozens of active buyers, who entered during my open houses, there were 69 showings by agents, ten offers made, and the home sold at 95% of the asking price.

And there are many positive indicators 2011 will be a good solid year for the Sarasota real estate market. I believe sales will be a full 50 percent above the numbers for 2006-2008. As I discussed in my last newsletter, there are many things we can learn from the 2010 market, and as we go into 2011 there are three things I believe will help as we transition to a stable market:

1) We are not at a bottom the market is recovering and improving

For me, to know that we are at the bottom is to be able to say unequivocally that if someone bought a house today, they should be able to sell the house tomorrow for a “nickel more.” I am not convinced we’re there yet.

However, there have been enough quality sales during the past year to demonstrate fairly obvious ranges when comparing similar properties. Homes that are move-in ready set the market. Sellers of fixer-uppers, or dated homes, are being asked to take discounts far exceeding the work needed, to create that turn-key experience.

2) The best opportunities may be behind us – there is less value to be achieved in a stabilizing market.

When I look at some of the prices buyers paid during the past 12 months – especially for distressed properties – I believe buyers who were bold enough to move forward made some great investments and are already enjoying the lifestyle change.

I think as we get closer to a stable market, the property condition becomes the determining factor in setting prices for Sarasota realtors. Currently, the perception is, that a distressed sale should be sold for less than a similar property that may be inferior. The stable market we’re moving toward looks at traditional factors to determine market value: location, age of home, and property condition, with only a limited discount based on ownership.

3) The best values are over $1M.

As I have shared previously, the area with the least amount of buyers, relative to inventory, is properties listed for more than $1,000,000. Right now, there are 668 listings currently over $1,000,000. If we use the average rate of sales from the last 6 months, of 15 per month, it would take 3.5 years to sell the current inventory. Therefore, a buyer has the most leverage in this segment, when dealing with sellers who want to sell in under nine months.

All-in-all it promises to be a good year for Sarasota’s real estate market. And I, for one, am excited about all the prospects Sarasota offers in 2011. I’m enthusiastic about the market, and even more enthusiastic about the place. I really believe people who choose to enjoy our wonderful Sarasota lifestyle will always be glad they did.