“The more that you read, the more things you will know. The more that you learn, the more places you’ll go.”
— Dr. Seuss

Sarasota’s Pine View School is HOT! HOT! HOT!First for the GREAT news!

The newest US News and World Report rankings were released for Best High Schools in the U.S. and Sarasota County’s gifted program, Pine View School was ranked the #1 public school in the state of Florida and #7 public school in the United States.

This is a win for the entire Sarasota community.

High School Graduation Rates in Sarasota vs. the Rest of Florida

Sarasota’s graduation rate sits at just under 80%. This is slightly higher than the rest of Florida, but I feel improving this percentage is fundamentally important. With 1 in 5 students not reaching graduation, the community can do better.

Numerous studies show that in pure social and economic terms the greater the percentage of graduates, the more a community benefits from both increased revenue generated by and from the graduates, and lower expenses needed to serve those that do not make it through high school.

Higher Education Initiatives to Ignite the Sarasota Spark!

1. Recently there has been a big push to keep Florida college graduates in the state because employers need high-quality workers. The four local colleges of Sarasota – New College, Ringling College of Art and Design, State College of Florida, and the University of South Florida Sarasota-Manatee – are collaborating in an effort to allow students at any one of the schools to round out their curriculum and education by taking classes at any of the other three.
2. Innovation Station is an initiative started by the University of Florida and is being piloted in Sarasota. The intent is to showcase to both local high school and college students the potential engineering-related employment opportunities in Sarasota. For those with interest, the program can assist high school students with getting on the engineering trajectory and into the engineering program at UF. It can also help current college students return to Sarasota with their newly acquired skills and engineering degrees.

Sarasota School Superintendent Search in Progress

Sarasota County is currently conducting a search for a new superintendent. While the current administration stands on a good foundation and has received high marks, there is room for improvement. The road ahead is filled with diverging opinions about how to improve and how to measure that improvement. Right now there are 3 community forums open to the public to discuss what we as citizens want in our next superintendent. Lisa and I have been engaged with the school board this year and as such have an even greater understanding of how paramount this decision is for Sarasota.

According to James Heckman, winner of the Nobel prize for economics, every dollar spent on quality early childhood programs results in long-term benefits worth $8.60 to the economy. That is over 8 times the return on every dollar invested in education!

Sarasota’s education system benefit all students, which in turn improves our community and its economy, and as a result, we will see stronger and more stable real estate values.

Call with any real estate question: 941.587.0740.

While the number of sales dipped a mere 1% over the prior year, the dollar volume of real estate that changed hands increased this past quarter.

Dueling factors affected Sarasota’s real estate market during January, February and March of 2016:

• The stock market went from some of the lowest levels in the past two years to some of the highest levels condensed into just 90 days. The high points create more buyer confidence.
• The presidential primaries have been the source of much debate, and also potentially create the perception of uncertainty. This can detract from buyer confidence.
• The price of gas has risen 23% during this time period. Lower prices at the pump kept money in people’s pockets that could be used elsewhere. That can potentially impact savings and spending.

The Luxury, Affordable and Distressed … Oh My!

In the Sarasota luxury market, those properties listed for $1M and above, sales increased by 35% over the same period a year ago. I continue to believe as Sarasota’s natural and cultural amenities gain more and more recognition, our city is able to compete at the national and global level against other popular Florida brands.

The distressed market tumbled to ½ of what it was during the first quarter of 2015. It is now only 10 % of the total market. The good news is that there are many more properties that have positive equity. There are also neighborhoods where the current values are still significantly below the sales prices at the peak. There can be major price differences even within many of Sarasota’s more desirable neighborhoods.

The affordable market (properties selling for $200k and less) is shrinking, although it still accounts for 42% of unit sales in our market. It contracted by 22% from a year earlier. This is a sign that prices are going up

I look at the real estate market on a quarterly, rather than monthly, basis as I think it provides a more balanced look at the local economic dynamics. This tends to even out the effects of weather events, currency fluctuation, global crisis, etc.

The real estate market here in Sarasota is healthy if your metrics are increasing prices and units sold. But we must not be complacent, new residents to Sarasota and long-time property owners need to advocate for their community to aim higher for an even quality better life here. I will discuss this more in next month’s newsletter: “Dr. Seuss’s Advice on Sarasota’s Real Estate Market and Schools.”

Any questions? Call me at 941.587.0740. 🙂

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.

The median sales price in Sarasota continues to climb upward. As a broker in Sarasota’s luxury market, I want our clients to know:

1. Why is this happening?
2. Is this sustainable?

The answer to the second part is easy: rapid appreciation rates that are a significant departure from historical norms are NOT sustainable. With historical appreciation rates somewhere between 3-6.5%, we have had double-digit appreciation of median prices 3 of the last 4 years.

Let’s take a look at our recent history to understand who has been buying and their motivations.

Global Buyers Took Control After the Crash

In 2010, 2011, and early 2012 as our Sarasota property market was searching for a bottom, we benefited from tremendous foreign investment. Properties were very inexpensive, and exchange rates contributed to even better “bargain” prices for the global buyer. This group had a better vantage point and the ability to see the whole forest – and they bought up a huge portion of inventory throughout the state of Florida.

Pent up Demand Precipitated the Next Wave of Growth

While there is overlap in the market forces, and rates of change differ both at the community and neighborhood level, 2012 was a significant transition year.

Domestic buyers were beginning to express themselves. This was a group that had suspended their plans and put their lives on hold while waiting for the 7-year real estate decline to end and a recovery to unfold. This reemergence and their pent-up demand strongly contributed to market growth into 2014.

Stock Market Gains and Foreign Currencies Weaken – Who was Buying Next?

Investor wealth was also increasing. By 2013, the stock market had gained back all of its losses and then some. In fact demand for real estate increased as more domestic buyers had the opportunity to move their positions from stocks to real estate.

In mid-2014 the foreign currency markets turned in favor of the US$ (most noticeably the Euro and the Canadian dollar). With the weakened buying power of the global buyer, along with rapid appreciation, Florida real estate sales to the global buyer (as purchases shifted from incredible bargains to good opportunities) did indeed fall off for almost a year. Since many buyers who had been waiting also had already purchased, you would think this would soften the market.

Going into 2015 I thought that the market would stabilize and return to more historical norms, yet this has not occurred.

Why Is There Still So Much Momentum, And Will It Hold?

Here we are at the beginning of 2016, more than three years into this phase and prices are not just rising but they are rising rapidly. Is it the price of oil, the cost of the 30-year mortgage rate, or a reawakening of the Force?

I predict this momentum will hold for some time. Read part 2 of 2: Rapid Appreciation in Sarasota Real Estate.

Call me with any real estate question: 941.587.0740.

This newsletter highlights the Port of Manatee (POM), which I just toured personally, and its role in buoying our local economy and bringing long term stability to our Sarasota real estate market.

Florida is home to 15 seaports! Seaports are created by the local municipalities to bring jobs and revenue to the community. While ports in Florida compete with one another, they also compete against ports throughout the US. A report commissioned at the end of 2014 indicates that there is a lot of available capacity in Florida’s ports.

Essentially ports are in the commercial leasing business. They lease land to companies that are in the distribution business, getting imports from the boat to consumers as quickly and as cost effectively as possible. They also aim to place exports on those same boats as they move on to their next port of call. The opportunity for exports or imports is fairly predetermined by geography. For example, the POM is about 75% import whereas the Port of New Orleans is about 75% export.

Things are going bananas with Port of Manatee Imports

The POM opened in 1970 and operates on 1100 acres. Revenue for fiscal 2015 was about $10M and they estimate it contributed $2.3B to the local economy. This includes the six immediate counties: Manatee, Sarasota, Pinellas, Hillsborough, Hardee, and Charlotte. There are more than 5,000 acres surrounding the port that has been rezoned and provide incentives for port- related businesses. Here are the activities that I found most intriguing:

• Del Monte is perhaps the most well-known brand operating at POM. It is their main point of entry for the Southeast. They bring in 75 ships per year and send out 125 trucks per week as far as Canada. There is more refrigerated space at POM than any other Gulf port. Last year they imported more than 46 million pineapples and over 1 BILLION bananas! That would be enough bananas to circle the globe more than 4.5 times.
• Ringling Brothers and Barnum & Bailey Circus call POM their winter home. They spend six weeks on 61 rail cars, with 100s of people from 27 countries calling the POM home during the winter.
• Now with the US and Cuba cultivating a relationship there are plans to launch a passenger ferry from the POM to Cuba. It would leave in the evening and arrive in Cuba the following morning.

How is Our Local Port Good for the Sarasota Real Estate Market?

Communities create ports to create jobs. I continue to maintain that diverse and better paying jobs is good for our economy, and therefore lends to the stability of our Sarasota property market. If you or someone you know is curious about the POM and how it contributes to the local economy, they provide free tours to the public from October through May. Check them out online at portmanatee.com.

The layout of the Sanctuary’s SUNNIEST 3 bedroom/3 bath residence allows for the ultimate enjoyment of the Longboat Key indoor/outdoor living experience! Open living/dining space soak in the natural light with floor-to-ceiling glass sliders unfurling to a 750 sq. ft. wrap-around balcony. As a corner unit, the condo is uniquely positioned to capture the cross breeze from the Gulf and sunlight throughout much of the day. East-facing bay window streams early am sun into the kitchen. From your terrace, hear the “ping” of an eager golfer on the fifth tee of the 18-hole golf course.

At cocktail hour capture the sun setting over the beach from the balcony. Both the master bedroom and the outdoor balcony offer views of the Gulf of Mexico. The split layout allows for ample privacy between the master and second bedroom. A separate den can be converted back into a 3rd bedroom. With 2,375 sq. ft. of interior space, there is ample room to share your paradise with sun-seeking family and friends.

In 2012 all windows and sliders were replaced with impact glass. Ample storage and parking spot in covered garage. Tenant in place for Jan, Feb, and March with $28,000 of rental income. The Sanctuary is one of the elite beachfront resort condominiums set behind the gates of the Longboat Key Club. 24-hour manned gated entrance, Olympic-sized heated pool and spa, lighted tennis courts, fitness center, and clubhouse. Owners are eligible to become members of the Longboat Key Club which gives access to superior golf courses, 6 private restaurants, a spa, and a wellness center.

Call me with any questions: 941.587.0740