This month I want to review the changes in the Sarasota real estate market during the second quarter of 2011. I’m glad to see that what is palpable anecdotally from my experience every day has been proven by the numbers for Q2 2011.

A Promising Quarter

The number of properties sold for the 2^nd quarter is 16% higher than during the 1^st quarter of 2011.

The market is moving again and, while not robust yet, there are some good indicators, particularly that the number of distressed sales is down significantly from 40% of the total properties sold during the 1^st quarter, to about 30% of all properties sold in the 2^nd quarter.

Which Areas of the Market are Performing Best?

While 90% of the market is under $500,000 there has been a 12% increase in the number of properties sold between $200,000 and $500,000.

For properties listed over $1m, there is now just 16-17 months of inventory down from 31 months of inventory a quarter ago, so as I have mentioned before, properties in this part of the market have been moving well.

What Do These Recent Changes Mean for Your Sarasota Investment Property, and For the Market in General?

It is been quite evident for several quarters that Sarasota has become very affordable again, and now the luxury buyer has tamped up their purchases. This validation at the higher end of the market confirms the desirability of Sarasota property, and this past quarter’s numbers show there are opportunities at all price points.

While I don’t see real appreciation happening for several quarters yet, the better properties are selling quicker, now, and that’s great. It is really encouraging to experience the healthy activity in the market.

Kermit the Frog once said: “It’s not easy Being Green”. However, I’ve found it’s getting easier to get Green all the time. It’s now just a question of how you choose to make green work for you. And in our great Sarasota lifestyle ways to be green abound, whether your choice is to eat as a “localvore” or, as my children and I enjoy doing, cycle to school.

While Green philosophy is highly interpretative, at root it’s simply asking us to be more conscious about our choices which affect the planet. The great thing about “modern” Green is there are some mind-blowing and exciting ways to be eco-conscious now in your Sarasota property.

Exciting Innovations to “Green” your Sarasota Home

This year I had my green eyes opened when I attended the International Builders Show. I was thrilled to see so many innovations and ideas in action. Some of the green products I found most invigorating included:

Home Windmill

Not your ancestors’ 18th century windmill, but a rooftop wind turbine,which generates electricity with winds of only 0.5mph, created by Honeywell, one of America’s top 10 most inventive companies.

I was amazed for $6000 this sleek turbine could be powering part of my home with so little breeze. It automatically switches between the electric grid and the turbine’s generated power.

LED Lighting

In the green world LED lights are all the rage for being energy efficient, but what does that mean for lighting up the house? First, there are some big numbers: consumers and businesses will spend about $4billion in 2011 on light bulbs, and then another $40bn on electricity for lighting.

The buzz around LED lighting is it uses up to 80% less electricity than old-fashioned light bulbs, and may last 12-25 times longer, which is good for the landfill, and it’s also made from potentially less-toxic products.

My research says lighting is 10-30% of the average electric bill so using LED lights could reduce costs from $120-$360 a year, as well as reducing waste.

Electric Car Charging Station for your Home.

At the show the ground-breaking Nissan Leaf was featured. When you open the “gas cap/fuel door” on electric cars instead of hole there is a fancy electrical outlet.

And I was particularly impressed by the charging station created for it by Leviton. It controls and monitors the flow of electricity to your Plug-in Electric Vehicle (PEV), which needs to be charged each night, they even have a video on how you can install the charging station on your own.

Bottom Line: Green is Good Business Sense

As jaw-dropping as these innovations are the bottom line is, as always, in the pocketbook.

A recent McKinsey & Company report documented returns from energy efficiency and conservation measures, showing global growth in electricity demand could be halved over the next 25 years if energy efficiency measures are adopted.

Rather than focusing on increasing capacity via Nuclear Power or Coal Burning, the landscape will be cleaner as there are less inputs and outputs as energy is conserved. It makes good financial sense for huge, long-term tenants, such as the State of Florida which owns or leases about fifty million square feet of buildings.

Conservation is still the best way to save money and the environment, as the people placing these amazing products at our fingertips most certainly know. How much you choose to be a green leader of the pack is up to you.

The books are in on Q1 2011, and what a fascinating market we’re looking at. I’m seeing some really promising sections, some areas that decreased, one golden niche, and something priceless that’s driving the market.

What actually happened?

Overall, sales were up nearly 20% from the previous quarter — that nets out to almost 400 more properties sold January thru March compared to October thru December.

I don’t know how much weather plays into the equation, however, the weather during the last six weeks has been great. Perhaps that is why nearly 950 properties changed hands in March alone!

What this means for you as a buyer or a seller of Sarasota Investment property:

With the uptick in activity, sellers have been digging in their heels a bit more during negotiation. While buyers are not quite getting the deal they hoped for, they are moving forward and both sides seem happy with their decisions once the closing is behind them.

One of my listings will close this week. It was on the market for 12 days and received 20 showings and three offers that were of 95%, 97% and 100% of the asking price. This is a market on the move.

How’s that playing out at different price points in the Sarasota real estate market?

The bulk of the Sarasota real estate market activity is still with properties listed under $200k, which represents about 2/3 of all sales. More than 91% of all homes sold were properties listed under $500k. This is very consistent with the previous quarter.

The number of distressed properties that sold increased by almost 15%. Roughly 4 of every 10 properties that changed hands were distressed, which is also consistent with last quarter. And while the raw numbers increased the actual percentage of distressed sales as a percentage of total sales decreased, which I believe is a good sign.

Looking for a deal? There’s one magic niche…

One of the brightest segments of the market was properties listed over $1m. I spoke last time about how I saw this as a niche where the best deals were to be found.

Indeed this came to fruition as this segment saw a 30% increase from the previous quarter and inventory levels are now down to 2 ½ years (a significant decrease).

I believe that this increase in the higher-priced property sales is strong validation for our market. While there are so many unknowns in our world it is encouraging that more buyers and sellers are coming together and moving forward.

And the Priceless part?

The common sentiment from my clients who purchased homes here within the last two quarters is that they are so happy to be enjoying their new lifestyle. One client in just the last few days greeted me with a big hug and shared that their purchase of a waterfront home on Siesta Key was one of the best decisions of his life.

If you have any question, give me a call at 941.587.0740.

Dovetailing from last month’s analysis of the sales numbers, it is clear the Sarasota real estate market is transitioning. What does that mean?

I feel it’s most pertinent to share with buyers right now that there is demand, i.e. competition, in the marketplace. Just to provide an example: I just sold a listing on St Armands Circle. In addition to the dozens of active buyers, who entered during my open houses, there were 69 showings by agents, ten offers made, and the home sold at 95% of the asking price.

And there are many positive indicators 2011 will be a good solid year for the Sarasota real estate market. I believe sales will be a full 50 percent above the numbers for 2006-2008. As I discussed in my last newsletter, there are many things we can learn from the 2010 market, and as we go into 2011 there are three things I believe will help as we transition to a stable market:

1) We are not at a bottom the market is recovering and improving

For me, to know that we are at the bottom is to be able to say unequivocally that if someone bought a house today, they should be able to sell the house tomorrow for a “nickel more.” I am not convinced we’re there yet.

However, there have been enough quality sales during the past year to demonstrate fairly obvious ranges when comparing similar properties. Homes that are move-in ready set the market. Sellers of fixer-uppers, or dated homes, are being asked to take discounts far exceeding the work needed, to create that turn-key experience.

2) The best opportunities may be behind us – there is less value to be achieved in a stabilizing market.

When I look at some of the prices buyers paid during the past 12 months – especially for distressed properties – I believe buyers who were bold enough to move forward made some great investments and are already enjoying the lifestyle change.

I think as we get closer to a stable market, the property condition becomes the determining factor in setting prices for Sarasota realtors. Currently, the perception is, that a distressed sale should be sold for less than a similar property that may be inferior. The stable market we’re moving toward looks at traditional factors to determine market value: location, age of home, and property condition, with only a limited discount based on ownership.

3) The best values are over $1M.

As I have shared previously, the area with the least amount of buyers, relative to inventory, is properties listed for more than $1,000,000. Right now, there are 668 listings currently over $1,000,000. If we use the average rate of sales from the last 6 months, of 15 per month, it would take 3.5 years to sell the current inventory. Therefore, a buyer has the most leverage in this segment, when dealing with sellers who want to sell in under nine months.

All-in-all it promises to be a good year for Sarasota’s real estate market. And I, for one, am excited about all the prospects Sarasota offers in 2011. I’m enthusiastic about the market, and even more enthusiastic about the place. I really believe people who choose to enjoy our wonderful Sarasota lifestyle will always be glad they did.

I see 2011 as a transition year for real estate in Sarasota. I meet a lot of buyers in the market via my open houses in Sarasota. This gives me great insight into the needs and wants of today’s buyers: three bedrooms, a garage space, and the ability to have dogs, to name a few.

There are Keen Buyers in the Sarasota Real Estate Market

First, there are a lot of buyers. I’ve found, in the past, that people attending open houses tended to be more in an exploratory mode. Lately, I am meeting many individuals who are genuinely earnest about purchasing in the immediate future. In other words: the market has some very active and engaged buyers.

I believe more than 90% of the people coming to open houses really do think they want to buy within the year. However, most of today’s buyers have the ability to purchase now, they’re just waiting for a sign that the time is right. They may be hesitating because they just don’t know what that sign is.

To help people clarify, I’ve summarized the main signs we got from the Sarasota market this past year, and give my predictions of what those signs mean for 2011.

What Happened in the Sarasota Real Estate Market in 2010?

1. In 2010 Sarasota was a recovering market, and in all, the year was a good one for Sarasota real estate. The number of properties sold was up 8%, from 2009 to roughly 8,925. I believe that a level of around 9,000 properties is a good target for 2011. This number is a healthy 50% higher than the average volume from each year between 2006-2008.
2. The raw number of distressed sales shrunk, and continues to do so, and discounts on distressed inventory are also decreasing. Distressed sales are down 10% from Q3 to Q4 in 2010 but still made up more than 40% of sales in the 4th quarter.
3. While local employment numbers remained steady, between 87.5 and 89%, the overall health of the community seems palpable. Municipal projects are getting done, including parks, parking garages, and beautification projects. And people are attending events in healthy numbers.
4. The number of sales for Sarasota investment properties listed over $1 million edged up slightly during the 4th quarter of 2010 and the percentage of sales under $200,000 went down slightly. During the 4th quarter, 66% of the market was under $200,000 and 91% of the market are sales of $500,000 or less.

What this means for 2011 in the Sarasota Real Estate Market

In my opinion, good values will stay with us for a while as the market stabilizes this year. The market for properties over $1 million is experiencing inventory growth and offers some opportunities for those at this tier of the buyer’s market. But, there is still some great value to be achieved in the rest of the market too, even though the best opportunities may be behind us.

Again, buyers I meet have lots of information. The majority believe it is a really good time to make a purchase. Many are just waiting for a sign to determine when they actually make the leap. Now, in this transitioning market, I agree with them that it’s a good time to become a buyer.

Like the stock market, there are numerous opinions on the real estate market. I think, while there will continue to be volatility here in Sarasota, closings in 2011 will be around the 2010 number of 9000. I also believe, more importantly for many, this next purchase decision is a lifestyle choice and those that move forward this year will be glad they did.

Any question? Call me at 941.587.0740.

This week I’m helping a family buy a home on Longboat Key, FL. In today’s Sarasota real estate market they’re going to pay a full 10 percent less than the current homeowner paid just one year ago. This illustrates one of the major challenges for the seller in this environment, and creates a critical choice for most: Whether they should stay or sell?

Typically, sellers usually sell when there is a major life change: adding to their family, a death, a job change. And historically, it has mostly been easy to sell and move on to the next property. However, due to the re-pricing we’ve seen over the last five years, and the tremendous economic volatility for the last two, a lot of homeowners have felt stuck.

Primarily because their homes are worth less than they paid, if the purchase has been during the last 5-7 years. Faced with these hard facts and uncertain market data, many are paralyzed in the face of the decision should they stay or sell?

My Three Ws for Sarasota Real Estate Decision Making

I’m asked all the time by clients what the solution is to this choice. I’ve come up with three questions homeowners need to know the answers to, and feel comfortable with, in order to be ready to become a seller in today’s Sarasota real estate market.

1. Why do they want to sell? Is it one of the life changes I mentioned above, or simply because of a desire for a different lifestyle?
2. Where would they like to go? Are they going to stay in the same community, or move to a new neighborhood or city altogether, with a total change of geography?
3. What are they going to do with proceeds? Is there enough equity in the property that they’re going to be able to take some of that money off the table by downsizing? Or alternatively, will they be moving up the Sarasota real estate ladder?

Or, is there going to be a loss? In which case they’re going to have to make up the shortfall themselves, ask friends and family, or go to the lender to ask them to forgive the difference between what’s owed on the loan and the proceeds from the sale.

With answers to these three questions, homeowners should be equipped to determine whether or not they want to be a seller. Once they get comfortable with the answers, they should be able to decide to sell or stay put according to their own personal situation.

Making the Change and Cutting Losses Today? Or Hanging on For Tomorrow?

The other question people want to know the answer to is whether it’s better to make the change today or wait for some unknown point in the future when the equity will have increased, or the amount of loss will have decreased.

While it appears that some price stabilization may be occurring in 2011, price appreciation appears to be still further off. But in this current market, and after the tough couple of years we’ve had, many people are choosing to just get on with living, as I discussed in my newsletter last month.

For those looking to become a seller, my three Ws should help them analyze whether they’re ready to answer today’s market’s critical question: “should I stay or should I sell?”

The Buyer’s Dilemma in Sarasota’s Real Estate Market

It is clear we have embarked on a new season here in the Sarasota property market. I have seen buyer activity surge in recent weeks, but there is still a lot of reticence in pulling out the check book. In this month’s newsletter, I want to reflect on what I think is happening in the minds of buyers and what I call the “buyer’s dilemma.”

Sarasota Realtors are Seeing Historically Great Value on both Money and Property

First, many have come out to play, so to speak, as interest rates are at or near all time lows AND Sarasota real estate purchase prices are also at historical low, which makes buying Sarasota investment property, right now, incredibly attractive.

What has many on the fence is the volatile information about the economy. For those making the leap off the fence, the Sarasota lifestyle is often the deciding factor.

Sarasota Property’s Unique Selling Point

Buyers are realizing Sarasota real estate is a very locally driven. Sarasota continues to be a place they return to year after year, and they are at a point where they personally are ready to make a life change and start enjoying Sarasota’s unique selling point, it’s fantastic lifestyle and beaches.

I am not sure that we will ever precisely know at what price or day we reach or reached the bottom. However, both local and out-of-state buyers seem to be in agreement that there are some great values in the market and worthy of accelerating the purchase decision.

Buyer’s Challenge in Today’s Sarasota Real Estate Market: Lack of Inventory

There is a genuine lack of inventory for single family homes as you move closer to the water. Buyers are truly having to prioritize the importance of location, size, or amenities as once they hone in on one criteria there may be only a handful of choices in any given price range.

For example, this week I had a clients looking for a three bedroom, two bath, two car garage on boating water on St Armands Key. There were only two options under the $700,000 mark. The lack of inventory is not driving prices up in the short term but it is causing buyers to determine if they are buyers today or next month, next year, etc.

Choosing Sarasota Investment Property and Lifestyle that Fits

So what should today’s Buyer do when facing this conundrum? As I continue to maintain, Real Estate decisions are both local and personal. When you find the property that is a good match, negotiate a good deal, move forward with confidence and enjoy your new lifestyle.
Need any help with your real estate decisions? Call me at 941.587.0740.

As highly educated consumers, my clients continually ask great questions about the local real estate market. It is our experience that providing real information is the best way to help you make informed decisions. Here are the salient points with respect to Q3 along with where I personally feel buyers can find good values in Q4.

So Where Was all the Action?

Residential sales for Sarasota County totaled around 1,800 properties. Less than the previous quarters, yet a number that indicates steady activity. The majority of sales, in fact 92 percent, were in properties under $500,000. In this segment there was lots of activity and this is great for both buyers and Sarasota realtors as it gives us lots of information to work with in determining comparables and accurate market values. We now have a really good sense of what a property will sell for in this recovering Sarasota real estate market based on square footage, location, etc.

Overview of Property Sales in Sarasota Q3

Overall the number of sales was down from Q1 and Q2. This is consistent year after year for the summer storm season in our resort community, but I think we can also attribute this to other factors:

1. The government tax incentives for home buyers expired
2. The Gulf Oil Spill
3. The mixed economic data we are receiving

Positive Indicators in the Sarasota Real Estate Market

The most positive indicator in Q3 for the health of the Sarasota real estate market was a decline in distressed sales as a percent of overall sales. These are short sales or sales of bank-owned properties and it is terrific for the Sarasota market that these decreased by 19 percent over the last three months. This indicates fewer homeowners are finding their homes unsustainable, and thus the entire market is more stable.

Where do I see the Most Opportunity in the Sarasota Investment Property Market in Q4?

Last quarter there were only 47 sales total for properties listed for over a million dollars. This is, in my opinion, the absolute best area for opportunities in the next quarter. With the cost of money still so low, and the likelihood that sellers are more apt to negotiate down in order to move their property, I feel there is a real chance to find great values.