Housing prices hit another high mark
Sarasota-Bradenton (FL) median price rises to $336,800, while volume falls
By Rich Shopes and Michael Pollick
heraldtribune.com
The median price for an existing home in Sarasota-Bradenton's white-hot housing market rose to an all-time high of $336,800 in June, 39 percent higher than last year and the fourth consecutive month above the $300,000 mark.
At the same time -- and perhaps a major factor in driving such stratospheric pricing -- sales dropped 20 percent from June 2004 to last month. Buyers seeking a cheaper alternative in the Charlotte County-North Port market still found it, even at $216,500, and that could help explain a 22 percent increase in sales there.
Market watchers say that some investors are holding tight, hoping to cash in on a continued rise in appreciation, while some homeowners, especially those in the under-$500,000 market, are refusing to sell for fear that they won't be able to trade up or they won't be able to afford their new tax bill.
So when is Southwest Florida likely to reach some kind of pricing zenith?
Many predicted it months and months ago, and it remains the magic question to which no one seems to have a definitive answer.
Southwest Florida is relatively underpriced compared with Naples, West Palm Beach-Boca Raton and Miami, hot spots for well-heeled retirees and deep-pocketed investors. That's prompting buyers to shop in Sarasota-Bradenton.
"We had some catching up to do," said Michael Saunders, founder and president of the independent real estate brokerage that bears her name. "Compared to some of the other markets in Florida that we are often compared to, like Naples, like Palm Beach, we were very undervalued."
"When we catch up, it will level off. That's what I think we are doing."
Sales in the Sarasota-Bradenton market dropped from a more heady pace of 1,604 homes in June 2004 to 1,276 last month, the Florida Association of Realtors reported Monday in its snapshot of existing home sales.
Statewide, volume fell, too, dropping 3 percent while the median price vaulted 31 percent to $248,700.
Charlotte County-North Port saw sales rise from 401 in June 2004 to 490 last month while the median sales price climbed 16 percent to $216,500.
Low interest rates coupled with continued strong demand is driving prices, not just locally but across Florida and in many housing markets nationwide.
In a similar report issued Monday, the National Association of Realtors said existing home prices jumped 14.7 percent last month to a median, or midpoint, of $219,000.
It was the biggest one-month gain since 1980.
Other real estate agents agree with Saunders that Southwest Florida's increase is just the region catching up with other parts of the Sunshine State.
"We're going through what Naples went through 10 years ago," said Judy Schomaker, president of the Sarasota Association of Realtors.
But a boon for Schomaker's constituents isn't great news for everybody.
Buyers like Jason Nuttall, a Bradenton policeman searching in the under-$300,000 market, say listings are so tight that he's been forced to expand his search to include new construction. That end of the market is proving tough, especially in Southwest Florida.
"One of the frustrating things is that I work for the city of Bradenton and that for the same exact house and same exact builder I can go to Apollo Beach and it's $230,000 to $240,000, but if you try to buy that same house in Manatee it will cost $320,000," Nuttall said. "A lot of officers are looking in Apollo Beach."
At the market's upper end, the trend reverses itself. While demand is high, the inventory of available houses is high, or higher, as well.
"Anything above $400,000 or $500,000, it's much better," said Devon Davis, an agent at Re/Max Gulfstream in Manatee County.
But if current pricing trends continue, even buyers from Palm Beach and Naples might find Sarasota-Bradenton less appealing.
Those two markets, the state's priciest, enjoyed steady gains last month, too, but not at the same pace as Sarasota-Bradenton.
Prices in Naples appreciated 25 percent to a median of $491,400. In West Palm Beach-Boca Raton, they rose 30 percent to $406,800.
If Sarasota-Bradenton's appreciation rate continues, the region's median price will break through the $400,000 barrier by the end of this year.
That means Southwest Florida is heading for the Naples-West Palm Beach-Boca Raton bracket, where a modest three-bedroom, two-bath home sells for $400,000 to $500,000.
If that happens, more folks such as Nuttall, the Bradenton policeman, will be forced to live outside Sarasota-Bradenton and commute to work. That's what's happening in some pricey areas on Florida's east coast.
"We've got people commuting one hour from St. Lucie County to work in Palm Beach County," says Jonathan Satter, a principal at Compass Realty Advisors, a West Palm Beach commercial realty firm. "Where is the housing for the teacher or the policeman or the nurse? Where are they going to live? It's almost crisis-proportion in some communities down here now."
Victor Brett of Nestler-Poletto Realty spends much of his work time showing homes in Boca Raton and neighboring towns.
"People come to me and ask, 'Can I get a house for $375,000 with a pool?'" he said. "Anything decent in a good neighborhood with a pool is getting to be $450,000. And I'm getting hard pressed to even find it at that number."
Brett thinks the highest-priced homes are starting to level off in price.
"I think it is just about starting to happen now, not bursting but leveling off," Brett said. "We've got some multimillion-dollar listings and I see them slowing down, taking longer to sell than two, three years ago."
Two hours south of Sarasota in Naples, the median price for a home is about to pop through its next plateau on the housing chart -- $500,000.
Realtor Jim Redic, owner of First On Fifth Realty Inc., has been wheeling and dealing in Naples for 21 years.
"Not only have the prices gone nuts but people have gotten pretty greedy," Redic said.
Fueled by prices that rise noticeably from one month to the next, some sellers are backing away in the middle of deals, convinced that they can get more money than they agreed to.
Like Brett in Boca Raton, Redic is "starting to see a slowdown."
Much of the buying pressure of the last few years has come from investors burned by the stock market in 1999.
"People are getting more comfortable with the stock market, so that is taking away from the pressure to put it in real estate," Redic said.
He doesn't see prices declining or even leveling off, just "going back to normal-type increases."
Longboat Key Realtor Barbara Ackerman says she thinks investors in Sarasota might be backing down a little, too.
Some communities have halted leases or restricted them to curb investors and renters, and in other cases, the prices for homes have escalated beyond the rental market.
"You can't make any money if you rent it out," Ackerman said.
Investors who are buying either are banking on appreciation to turn a profit or planning eventually to move to Sarasota, perhaps when they retire, she said.
Realtors can't predict how long prices will escalate, but say they doubt they'll take a nosedive when the market does cool off. Instead, look for prices to level off gradually.
"Florida is going to remain one of the magnet states for retiring baby boomers," Saunders maintains. "The baby boomers love to invest in real estate, they love an active lifestyle and they are going to look to Arizona, California and Florida."
Added Schomaker: "I feel we'll have a really good real estate market for the next 10 years."
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Ramsey - if it weren't for Carol, I'd have had Casa by the Creek on the market... this is painful to miss... |
