For the last several months I’ve been talking about the bifurcation of old and new properties here in Sarasota. I want to specifically define “New” – in my mind, there are three categories in which we can classify something as new.

1) BRAND NEW DEVELOPMENTS

This refers to when a developer clear-cuts a piece of land and builds brand new homes. Location is secondary in this situation.

2) INFILL DEVELOPMENTS

In this scenario developers take an old property in a desirable location, completely demolish it, and build a new condominium or single-family home.

3) TOTAL REHABILITATION

When an individual takes a unit in older buildings (pre-2007), which are in the best locations and completely re-engineer the preexisting units to make them spectacular and competitive with the new inventory on the market. This would entail stripping everything back to the original outside walls and then creating a new floor plan and finishing’s that capture what today’s buyer wants.

HGTV Worthy 😊 Brilliantly Modern, Full Bay Views, Ultra Walkable Downtown Location

3 bed/2 bath, plus one-of-a-kind Bunkroom

View the Details Here ➤

NEWER PROPERTIES APPRECIATE AT GREATER RATE

I’ve been talking about the desirability of new properties- how they are selling for a premium and older properties are selling at a discount. Let’s use some numbers to specifically explore these phenomena. I took a look at properties that were built before 2000 after then after 2000. It’s not a perfect proxy, but it allows us to see that there’s a big differentiation.

• OLDER THAN 2000. The median price of properties that were built before 2000 increased by 2% from 2018 to 2019.
• NEWER THAN 2000. The newer properties, those built after 2000, increase by 3% in their median price over those two years.

There is a 50% increase in the value the market places on newer properties from 2018 to 2019.

More importantly, we see the median price of newer properties selling for about 24% more. A newer home would be selling for more than $1M, whereas an older home selling in the same location would be selling for less than $800,000. For the Buyer willing to do work they are able to create equity because the discount is greater than both the cost of the rework and market value once a reinvigoration is complete. To be clear this is more than just new counter-tops, cabinets and paint.

For sellers, don’t put off your deferred maintenance or updating your granite. If you’re planning on moving in the next one to three years, do the renovations or updates today and enjoy the benefits. Today’s buyers do not want to do any work. They don’t want to do any fixing up and they certainly don’t like granite that was in style from 10 to 15 years ago.

It may be difficult choosing where to draw the line regarding re-construction or knowing how MUCH of a discount should be taken.

For strategies and success in your next sale and/or purchase, give me a call @941-587-0740.

August is the last month of summer here in the northern hemisphere. But summer in Sarasota has changed a lot. It’s no longer your parents’ your grandparents’ Sarasota. As we’ve been out and about we’ve seen bustling restaurants and sold-out theater.

Today I want to share my views on both the short term and long term view of the Sarasota real estate market. The reason that I want to do this is that sometimes we’re a little too short-sighted in our outlook. I feel that the Sarasota real estate market is very strong whether we’re taking a shorter view or a longer view and I’m going share why.

Beachplace Condos: The Price Paradox

There’s a certain bifurcation (a fancy word meaning a division into two directions) occurring in our market right now. Let’s use Beachplace — a condominium on Longboat Key- as an example.

Today’s consumer is looking for either value or opportunity. For value they want location, setting, and condition. They seek the best locations for their preferred lifestyle experience- such as being walkable to the amenities they like. They seek the best settings- i.e., open water views as opposed to a closed-in canal. They prefer something that’s brand new or incredibly renovated, as opposed to something that hasn’t been touched since the 1950s or the 1970s.

At Beachplace, which is 11 buildings, 336 units, and over 1,200 linear feet of gulf frontage- you have both things occurring in the same complex. Those units that have a terrific full gulf front view and are really updated are selling for a premium. To illustrate this point, there is one unit that was purchased, gutted, renovated, and completely furnished with full Gulf views. It was made HGTV worthy. This unit sold in 10 days, and it resold for even more money a year later after being on the market 1 day. On the flip side, properties that don’t have much view and/or are still in their original condition are selling at a discounted price. There are units there that are selling for lower prices then they had sold for 2-3 years ago.

Job and Population Growth Driving Sarasota’s Long Term Health

Now let’s look at the longer perspective on the Sarasota Real Estate market – by this I mean from now until 2030. McKinsey Global Institute just published a report that is a great validator to what I have been sharing about Sarasota’s long-term health. They wrote about job growth and they predict Sarasota to have 10-15% job growth between now and 2030. This is important because economic growth and real estate growth are fueled by two things: population growth and job opportunity.

As I have shared in previous newsletters, it is well documented that Florida in general and Sarasota, in particular, will be experiencing strong population growth.

Sarasota is a niche market. It is classified as a Silver City because of all the retirees that come here and make it their home. The largest job opportunities for Sarasota lie in four sectors: healthcare, STEM, the creative arts, and business services.

As our community supports these four sectors and provides job training for jobs of the future we will continue to have economic stability. In addition, as we improve our amenities (whether it’s green spaces or infrastructure) and help people get better educated through our consortium of five local schools, our community is poised for great growth well into the next decade.

Looking at Sarasota wholistically –- both the short term and long term view- I’m very excited about the future of Sarasota and her real estate market.

Have a terrific end of your summer!

If you ask me how the Sarasota real estate market is right now I’d say it is healthy as indicated by the level of showing activity, sales, and a slow rise in median prices. However, the more germane question is what is happening in any given specific niche geography. It’s even more specific than the neighborhood. We have to get down to the exact street. To illustrate this point, I want to share two anecdotes from Lido Key and Bird Key — specifically focused on Blvd of the Presidents and North Warbler.

A recent sale on Blvd of the Presidents on Lido Key was listed initially for $4.99M then raised to $5.5M. The Seller tried three different Realtors and after 20 months, the property sold for almost $3,000,000 less than its high list price. The selling price was actually 25% less than its final list price.

What does this tell us?

First, the property was way overpriced, yet more importantly, it demonstrates the intelligence of the market and how it values different attributes unequally. This historic home — the former Van Wezel estate — has an incredible setting off of Otter Key, yet the location feels just a bit removed from Lido Beach and St. Armand’s Circle. There is no garage, a lack of landscaping, and the property is a bit disjointed. So even though the households tremendous historical significance, the market is speaking loudly to this Seller that having historical significance and a special setting was in the endless valuable than the condition of the house and the location.

As the Pelican flies, just 1,200 meters away on North Warbler Lane on Bird Key, there is a home that was built in the 1970s. Reminiscent of Brady Bunch architecture, this property went under contract in 4 days. This is 20 months faster than the previous example. There were multiple bidders and yet the property still sold for less than asking. The market is smarter than we give it credit for. Fortunately, the market is not emotional. The Bird Key property could be torn down or lived in, but being that it was on a cul-de-sac street, had a functional layout, ample square footage, a pretty view, and a neighborhood with a proven track record, the owner was able to choose an offer and move on with their life.

When we at Investments In Sarasota list properties, our philosophy continues to be to price it appropriately for showings and exposure. The market with all of its wisdom will show sellers the correct selling price. We ask that Sellers choose a real estate broker who will steward the sales process, give honest and constructive feedback, and most importantly let the market provide unfiltered information to be used in the decision-making process.

Sarasota Real Estate Sales up in Q2

All of this to say once again that the market is doing well, there are many people searching, and properties are closing. Let’s take a look at Sarasota’s sales numbers for the Q2 of 2019.

• Sales overall were up 3.4% from the same period a year ago.
• Affordability continues to decrease as properties in this segment (under 200k) decreased by 10%.
• Interestingly, distressed sales increased by 40% compared to the second quarter of 2018. Something we will watch in futures quarters, though a bit confusing since prices continue to rise. Distressed sales occur in 1 of every 40 properties sold.
• The luxury market (properties listed for $1M or more) had an increase of 3.3% for the quarter.

In the most established and desired neighborhoods on the barrier islands and close to the art and culture centers in Downtown Sarasota, good properties are selling well — especially those that are new, are choice lots, or require little to no work. The others are selling once the prices are adjusted to the market.

Today I’m sitting atop the Java Dog truck here at the Downtown Sarasota Farmers Market. This is one of the top-rated markets in the country — and it is open from 7 am to 1 pm every Saturday YEAR-ROUND! This is THE EPICENTER of Sarasota’s Local Scene — something I contend you should care about if you own
real estate in Sarasota.

Why am I placing so much importance on local? And as I’ve been maintaining for years, part of the economic success of a community is based upon a diverse and high paying job source. Local is a very critical component. When you buy products or services from locally owned businesses, 52 cents of every dollar stays here locally as opposed to leaving the area — that’s 50% more!

There are two key factors illustrating how this works:

1. Local money is recirculated. Money earned locally is also largely spent locally instead of being taken out of town.
2. Money spent locally flows back into local hands 2 to 3½ times faster — a concept called the velocity of money.

When money touches more people locally it’s great for the local real estate economy. A study by American Express showed that property values are 17% higher in communities that support local businesses. Whether you’re going to your accountant, your lawyer, your banker, shopping at a local boutique, or choosing to eat at a locally owned restaurant, diverting that money locally has a huge impact on the local economy.

It’s critically important that people spend here in Sarasota and the local businesses — whether it’s in
Southside Village, out on Longboat Key, or here in downtown Sarasota. During the Great Recession about ten years ago not all communities fared the same — in fact there were communities that did quite well. Our goal is to have the real estate values in Sarasota to continue on an upward trajectory. Sometimes a little bit faster, sometimes a little bit slower, but always maintaining that forward momentum.

Live Local. Eat Local. Play Local.

If you like to live where “Downtown is Downstairs” so that you can be totally immersed in the local food and art scene, check out the Mark, or Epoch, or the DeMarcay.

The Mark

605 S Gulfstream Ave, Sarasota, FL 34236
View The Mark Listings ➤

Epoch

1400 State Street, Sarasota, FL 34236
View Epoch Listings ➤

The DeMarcay

33 S Palm Ave, Sarasota, FL 34236
View DeMarcay Listings ➤

To get your personal tour of downtown Sarasota and the opportunities that abound give me a call @941.587.0740. for a personal walking tour.

During the next 10 years or so, about $1 BILLION will be spent on Arts, Culture, and Lifestyle in and around downtown Sarasota. How will this affect the experience of buying and living in Downtown Sarasota?

Communities around the world are looking for ways to improve the quality of life for their residents and visitors for one simple reason — money. Individuals, retirees, families, and part-time residents want to live in a community that has great resources. The better the quality of life in a community the more people and businesses it will attract.

Sarasota is built on weather, culture, good schools, and life-long learning. I strongly believe that the $1B investment in our local community’s quality of life will only strengthen and increase the $81.8B of property values here in Sarasota.

In case you may not be familiar with the major capital campaigns that are either already complete or in progress they include:

• The Bay Sarasota
• Ringling Museum
• Selby Gardens
• The Legacy Trail

The majority of the dollars flowing into these improvements is private money. As all this is going on, there are also plans for more roundabouts, more green spaces, more performances, etc. All this activity is generating exponentially more and advertising and publicity — which shines a brighter spotlight on our community.

My contention is that all this stimulates more engagement from visitors and residents, and also means more people are paying attention to what is going on and how it is being implemented, naturally raising the bar of expectation for planners and developers.

The Halo Effect: Small Community with First Tier Amenities

The improvements in our community also trigger increased revenues. Studies commissioned by the non-profit Americans for the Arts estimated that an average of $37.80 is spent beyond the cost of admission by each audience member for each performance attended. This number includes spending on hotels, parking, food, souvenirs, etc.

The formal venues in the greater downtown area amount to just under 21,000 seats within 10 minutes of Five Points — the intersection of Main and Pineapple — which we consider the epicenter of downtown Sarasota. (This does not include the dozens of restaurants & bars that regularly have live music and/or indoor-outdoor entertainment.) This translates to about $157M for 200 performances. This is a significant amount of money spent in Sarasota as part of attending a show or performance.

Among the EIGHT downtown hotels — five of which are new — there are now 540,930 room nights (1482 rooms per night) that are available. There are now TWENTY-NINE non-stop flights to and from Sarasota — up from just FOUR a short while ago.

Buying and Living Downtown

The investment downtown is attracting a more discerning resident who in turn requires better restaurants, cleaner and safer neighborhoods, and amenities surrounding the arts that are commensurate with the high-quality productions that are being presented. Developers are delivering residences at a variety of price points, however, all new construction condos are being built to a higher standard of design and finish.

The challenge is finding the right match for one specific buyer when you incorporate their specific criteria regarding size, view, urban sounds, walkability, etc. One of my concerns is that there is limited turnover in the heart of Downtown Sarasota, and therefore Buyers really need to be super in tune with their own needs and wants so they are prepared to move forward when the right match becomes available.

Interested in moving downtown?

Take a look at our comprehensive guide to New and Pre-Construction Downtown Condos now available on our website. Here you will find all the details on residential options as well as exactly how long it takes to walk to the downtown epicenter.

We counsel our clients to ensure they make the best Investment in Sarasota for them. This means both the investment in their health, happiness, and lifestyle goals, as well as one that makes good financial sense. We invite those who are keen on the urban downtown lifestyle to take a private walking tour of the opportunities in Downtown Sarasota. With the level of investment in the arts, the amenities are getting stronger, and with that, the return on investment is going to increase with time.

Give me a call @941.587.0740.

Sarasota has recently been named the #1 place to live in Florida according to US News and World Report (see updated 2022-2023 report). While this is the latest validation of Sarasota’s offerings to a wide range of consumers, more important is the consistency in the past few years of Sarasota being at or near the top of the many rankings and lifestyle metrics. As long as Sarasota continues to invest in itself by raising its own bar, so too will people come to make Sarasota their home for at least part of the year.