2015 Sarasota Real Estate Review & What’s in Store for 2016

Total Sales Continue on the Upward Trail

Every January I provide my annual year-in-review for our local Sarasota real estate market, along with guidance on what to expect for the upcoming year.

One of the facts that I find most fascinating as I take a step back to analyze the numbers, is that from 2010 to 2015, the number of properties sold annually has increased by 38%. In 2015 about 12,384 properties changed hands. This is an increase of 4.5% from last year.

What is Happening in the Trenches?

• The distressed market, while it still exists, gets smaller and smaller. It decreased 41% from the same period a year ago. It now represents about 1 in 7 properties.
• The affordable segment of the market – properties selling for less than $200,000 – is also shrinking. It decreased by 16.5% from the 4th quarter of 2014. While Sarasota’s affordability is decreasing, the good news is that the monthly payment to own is significantly less than the cost of renting.
• The luxury market, which are those properties listed for $1M or more, is up about 5.5 % over the same period a year ago. The segment continues to hold steady in the 4th quarter with a little more than 3% of the total sales in Sarasota.

How So Many Transactions With Low Inventory Levels

One of the main themes from 2015 was low housing inventory. This is true under $500k. There are about 2 months of inventory in the affordable (<$200k) market, and 4 ½ months in the $200-$500k segment. Despite the low inventory in the lower price points, we have still been able to see healthy sales under 500k (which accounts for 90% of our market.)

How is this?

The appreciation has reduced the number of properties that are upside down, thus making it easier for owners who have been waiting to list their homes. Once you cross the $500k threshold the markets swings to about 10 months of inventory and continues upward from there. This is the part of the market that still favors buyers.

What To Expect of Sarasota’s Real Estate Market of 2016?

I firmly believe that the changes in Sarasota in the next 5 years (from 2015 to 2020) will eclipse those from the first 15 of this millennium. Two main reasons include:

1. Sarasota will be hosting more visitors as the city expands its hotel capacity. I believe more browsers will translate to more buyers.
2. Developers and builders have a lot of land to build new construction on vacant land. This is true for parcels that still are undeveloped within the central Sarasota area, as well as lots of open land as they continue to move east.

These factors will contribute to growth and will keep some prices down as you move further away from the water.