Each month in my newsletter I talk about the news and developments that affect our real estate market here in Sarasota. This month I want to talk about three seemingly distinct factors that may impact our market: Brexit, Rentals, and Schools.
UK Buyers Looking for Safe Investment and Residence Alternatives
Brexit refers to Great Britain’s exit from the economic community of the EU. This separation is expected to start in the spring of 2019. This has caused uncertainty for property owners and investors in the UK. In the past two weeks, we have seen a dramatic increase in our book sales in inquiries into Florida real estate from the UK. While many of these purchases are focused on the Orlando area, it doesn’t take many investors to lift prices.
For years we have been helping international Buyers create a hedge with an investment in Florida real estate. It enables investors to own a real estate asset in US dollars in Florida and serves as a diversification from their property holdings back at home. The profile of the recent Buyer is in the $250-$400k range. Whether this increase in demand is large enough for our market, it is too early to tell. It is good validation for our marketplace, however, and it could drive prices higher.
Downtown Development Drives Exposure and Demand
To visitors and resident alike, development in Sarasota’s downtown is no mystery. The availability of new inventory began roughly a year ago, and for a span of the next 5 years Sarasota will experience the addition of over 6400 condominiums, hotels rooms, and apartment units. As this unfolds, I have kept a keen interest on how this impacts our market:
(1) How would new construction affect pricing both of old and new buildings in the market?
While there was the chance that all the new units would put downward pricing pressure on all new development, that data shows that demand is outstripping supply. Especially in the luxury market, pricing is up both in brand new condo developments as well as in the older buildings.
(2) How many of the guests of new hotels would purchase property here?
It is difficult to ascertain how many who come for overnight stays convert to property owners.
I do know that with nearly 600,000 additional room nights per year generates roughly 1.2 million visitors annually, and over the next 5 year period some are becoming owners and residents.
While the demand for condominiums has been strong, the demand for rental apartments has been even stronger. Living in downtown Sarasota has become trendy, and just as relevant is how the public and private sectors are working hard to consistently improve the quality of life here.
A Great Education System Matters
Public Schools in Sarasota County opened this week. There are about 43,000 students in the school system. For the 15th year in a row, Sarasota has received an A rating (one of only two districts in the state to do so).
The excellence in the school system is one of the biggest reasons that families choose to relocate here. This fact is not lost on the residents, especially the retirees, who understand the both the value of education and link between excellent public schools and real estate values.
Brexit, the growth in rental and condo inventory in downtown, and education are all very separate and distinct drivers, yet all have the ability to impact real estate values in our community.
There are many facets to understanding the nuances of our real estate market. Call me (941.587.0740) to discuss what’s affecting values in your building or neighborhood.