Tense real estate market causing prices to skyrocket in Manatee, Sarasota


Just over four years ago, the median selling price of a single-family home in Sarasota County was just over $ 250,000. But in the midst of real estate boom in progress, buyers today would be fortunate enough to find more than a few properties on the market at this price.

Sarasota County’s median selling price has climbed to over $ 380,000 as the number of homes on the market shrinks into dangerous territory for buyers and real estate agents.

Manatee County saw an almost identical increase in the median residential real estate selling price amid a declining inventory of homes for sale.

There are many reasons for the increase, according to residential real estate experts: builders burned by the latest economic crisis have drastically reduced speculative home construction, the COVID-19 pandemic has created a reimagining of office work where Zoom calls have allowed employees to live away from the office, and an unprecedented lack of inventory has created an environment where homes sit on the market for days, not months.

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Jessica Rodriguez encountered this buzz seen factors while looking for her first home. The 27-year-old works at Dentsply Sirona Products in northern Sarasota in manufacturing. Over the past three years, Rodriguez has saved nearly $ 10,000 to use as a down payment to be able to leave his parents’ house.

In January, she started looking for a house for less than $ 300,000.

Its options are not promising.

In all of Sarasota and Manatee counties, there are fewer than 140 properties for sale for less than $ 300,000, according to the Multiple Listing Service. Many properties in her price range will not meet the requirements for an FHA (Federal Housing Administration) loan, which she plans to use to finance her purchase. And with a plethora of cash buyers ready to pounce, sellers are unlikely to break through the regulatory hurdles associated with federally subsidized loans.

Real estate agent Barbara Smith, left, shows her advertisement on Ashberry Drive to potential buyer Jessica Rodriguez, center, and her friend Maria Cruz.  The limited inventory of homes under $ 300,000 creates a frustrating hurdle for buyers like Rodriguez.

“It was quite frustrating,” she said. “Every time I want to make an offer, it’s already under contract.

“I hope for a miracle.”

Meanwhile, the luxury market has more options. According to MLS data, Sarasota has 158 properties equal to or greater than $ 1 million and Manatee County has 97 listings in that range.

Challenges for real estate agents too

Rodriguez was hoping to buy a three-bedroom, two-bathroom home a little bit like his job. As of Friday, there were only seven properties in Sarasota that would meet its needs.

While auction wars and rising residential property prices may seem like a gold mine for realtors in the area, the reality of the shortage is that many will struggle to get listings. to sell.

The Sarasota Realtors and Manatees Association lists 7,758 members.

According to MLS data pulled Friday morning, there are 1,392 active listings across all types of residential properties in Manatee and Sarasota County. In 2016, Sarasota County had 2,941 active registrations and Manatee County had 2,082, according to the year-end summary compiled by RASM.

“If you throw a cracker and you have 700 pigeons, what will happen?” said Barbara Smith, a real estate agent with Fine Properties. “It’s tough out there and you better really know what’s going on.”

Realtor Barbara Smith says the majority of her sales have recently involved out-of-state buyers, which places a strain on people who might want to buy a new home in their own market.

Smith has sold two properties in the past 30 days. What she sees in the market is a rush of out-of-state buyers, often bringing money to the table.

All but one of its transactions this year involved out-of-state buyers. She believes that a healthy residential real estate market should be driven by local buyers.

A local buyer looking to move from a starting home to a slightly nicer home would ease some of the inventory pressure as people sell homes in the community and move to other neighborhoods in different neighborhoods.

Currently, many potential sellers who want to stay in the market are reluctant to sell their homes because they fear that it will be difficult to find a new one at a reasonable price, she said.

Chris Gremley, Owner Broker at Banyan Tree Realty LLC, describes his residential real estate operation as a one-man group, as he does all the marketing and projections.

“The first question I ask people is: where are you going? he said.

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If the answer lies somewhere in the same market, he warns them of the challenges.

If a buyer goes to someone who rents at a reasonable price in the market, their opinion is even more definitive.

“I tell them to renew their lease,” he said.

He, too, said many buyers are leaving the state where they had just sold a previous home. These buyers have significant advantages over those trying to finance a property.

If a buyer needs a bank mortgage, the property will require appraisal. If this valuation drops below the offer, the bank will require a higher down payment, or the seller will be required to reduce the price to appraised value.

“Appraisers are gods,” said Gremley. “That’s all, ‘Yes sir, no sir’ of me with them. You are definitely not arguing.

He listed a house of about 1,000 square feet built in 1947 with two bedrooms and one bathroom in Bradenton for $ 250,000. The property has a long-term tenant and he markets it as an investment property.

Gremley thinks he could have sold the site for that price more easily if it wasn’t for investment property.

“Several people have contacted me regarding the occupation of this property,” he said.

A bubble market,
but not like last time

Chris Jones, president of Florida Economic Advisors, holds a doctorate in economics from the University of South Florida. He is also a full-time faculty member of USF in the Department of Economics.

Jones described the residential real estate market as a bubble, but not a bubble that will burst any time soon. In fact, he doesn’t expect him to break out at all. Instead, he anticipates slow deflation as supply catches up with demand.

Many will hear the words housing bubble and have fears for late 2007 and early 2008. Jones said the engine of the market collapse in the early 2000s was demand, fueled artificially by access to easy loans. .

“Anyone who had a pulse could go out and buy a house far beyond their means,” he said.

“Today’s bubble is not fueled by the demand economy,” he said. “It depends on the supply side. ”

The economic slowdown at the end of 2007 prompted many builders to limit the number of speculative residential construction projects. In those they do, the number of units is a fraction of what they would have attempted before the real estate crash.

In addition, the pandemic has compressed supply chains for many products involved in new construction, such as plywood and lumber, driving up costs.

A third factor, he said, is that people employed in professional jobs have more flexibility as to where they can live. The pandemic has forced many companies to allow workers to work remotely.

Although the prices Manatee and Sarasota are experiencing are not outside of what he expects from the current economy, he said the rate of growth is not sustainable.

“People’s incomes are not increasing at this rate,” he said. “These price increases can only be sustained for so long. You won’t have enough people who can afford it.

He expects that as supply chains correct themselves and the cost of materials decreases, builders will come in and build new homes at more affordable prices, which will drive down the price of existing homes.

However, it will not be a quick process.

“I think you will see the housing markets continue to rise for 12 to 18 months,” he said. “But more supply always leads to lower prices.”

Tight inventory

Single-family residential

Location: Total number of ads: Less than $ 300,000: Greater than or equal to $ 1 million:

Sarasota County: 495: 79: 158

Manatee County: 418: 57: 97

Condominium

Sarasota County: 221: 54: 81

Manatee County: 114: 61: 4

Townhouses

Sarasota County: 30: 0: 1

Manatee County: 18: 3: 0

Mobile homes

Sarasota County: 32: 11: 0

Manatee County: 37: 36: 0

Prefabricated houses:

Sarasota County: 13: 11: 0

Manatee County: 14: 13: 0

SOURCE: multiple ad service data as of Friday morning.


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