I am a Realtor in Sarasota, Florida and speak to potential home buyers almost every single day. It gives me a good measure of the pulse of the Sarasota Florida real estate buyers out there. I am fortunate to hear all of the motivations, stories and backgrounds of the people who will own property in Sarasota. Here are a five misconceptions that I have noticed:
1) Property is not selling in Sarasota, Florida
This is simply not true. Sarasota, like other real estate markets, goes through ups and downs each month. One month sales are hot the next sales are cold. If you were to compare October 2010 to October 2006 you would see that home sales are 49% higher and pending home sales are 123% higher. Comparing today versus three years ago you would see them higher by 49% as well and pending sales higher by 94%. This month there were 569 closed transactions and 882 pending transactions. Things are selling.
2) Figure 30-50% off of the asking price
I love this one and bring it up to potential home buyers before we start looking at properties. Many buyers come to town thinking that they can just cut the price of the property in half and buy it for that. On average, in Sarasota county homes and condos are selling at 95% of the last asking price. Sellers usually have a 5-10% cushion in their price.
3) The number of homes and condos for sale are near an all time high
Sarasota county currently has roughly 6,900 properties for sale. However, keep in mind that the county is pretty large and includes Nokomis, Osprey, Venice and North Port. Many people want to purchase on the north end of the county where Longboat Key, Siesta Key, Lido Key, Casey Key and Bird Key are located. If this is your area of interest then you have far less than 6,900 properties to choose from. Sarasota real estate listings have been dropping nicely. In October 2006 there were 12,367 properties for sale in the county. Today’s inventory levels are down roughly 44%.
4) Getting a mortgage is impossible
Lending guidelines have changed over the last 5 years. It needed to. Loose lending led to the real estate bubble. Waiters and school teachers were buying million dollar homes in anticipation of flipping them for big profit. During the boom banks would lend you money on Sarasota real estate if you could fog a mirror. Lending guidelines have tightened. However, they will still lend on Sarasota Florida real estate if you can prove the capacity to pay it back. Lending seems to have tightened too much but it is still possible to get a mortgage.
5) There are plenty of beachfront foreclosures and short sales
The entire Sarasota real estate market is made up of roughly 40-45% distressed sales with 75% of those sales under $250,000. Many people come to town looking for a million dollar foreclosure on the beach. Many wealthy people on the barrier islands don’t have mortgages so you don’t see a bunch of short sales and foreclosures. For example, there were over 1,300 sales on Longboat Key since January 1, 2007. Only 69, or 5%, of the sales were considered distressed.
These buyer misconceptions are prevalent. Make no mistake that buyers still have the leverage in Sarasota, Florida. However, the leverage is decreasing every day. Eventually, Sarasota will be in a balanced market.
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