Florida's population grows to 18 million

Here is an interesting article from the front page of the Sarasota Herald Tribune today - according to new estimates from the U.S. Census Bureau Florida added another 321,697 people from 2005 to 2006, pushing the population past 18 million.

Among those fastest growing areas were Sarasota and Manatee counties, which between them have added nearly 93,000 more residents in the past six years. Manatee County's population surged to 313,298, up 7,044 in a year, while Sarasota's reached 369,535, an increase of 4,418.

"Fundamentally, in terms of climate -- even with the hurricanes, insurance rates -- (Florida) is still an attractive location," said Sean Snaith, a business professor and director of the Institute for Economic Competitiveness at the University of Central Florida. "It's not the only place in the country where people are retiring, but it's going to remain a popular place for retirees."

It is interesting to see that despite the higher property insurance rates and property taxes the population of Florida still increased by almost 900 people a day. It looks as though the state government will find a way to provide property insurance and tax relief. This coupled with a 20-25% decline in property values, Florida will again become a great place to move to for people that could not previously afford it.

House in Harbor Acres sells for record price

A home at 1423 Hillview Drive in Harbor Acres recently sold for $7.3 million. It sets a record for the elite and sought after neighorhood.

The high cost illustrates a truism about Sarasota real estate: opulence never goes out of style. The 10,500-square-foot mansion features six bedrooms, a home theater, an outdoor kitchen and entertainment area, a private dock and postcard-perfect views of Sarasota Bay and the John Ringling Causeway.

Sales have been somewhat steadier for multimillion-dollar homes. More than two dozen Sarasota homes in the $3 million-and-up range sold in 2006. Some larger housing markets had no such sales.

Chad Williams, the buyer, called the $7 million-plus price "definitely a deal." He decided to make on offer after seeing the house had been reduced in price from $9.95 million to $8.8 million and finally less than $7.7 million.

"We really see it as a tremendous investment that we get to enjoy," Williams said. "Mutual funds aren't nearly as fun."

"As expensive as the house was, it was definitely a deal," Williams said.

Source: Sarasota Herald Tribune

A contrarian seeks opportunities to profit from situations when the crowd mentality leads to unreasonable valuations for assets, either on the upside or the downside. In 2009 will we be saying, "I wish I had bought in 2007 when everyone else was selling"?

Is the smart money buying?

The chart above shows monthly pending and sold figures for homes and condos above $2,000,000 since December 2005. Notice the steady increase in the number of pending Sarasota luxury properties (red line). Is the smart money recognizing this as a good time to enter the market?

A contrarian seeks opportunities to profit from situations when the crowd mentality leads to unreasonable valuations for assets, either on the upside or the downside. Contrarian or not the sellers who sold in the beginning to the middle of 2005 when everyone was buying should be very happy as they got the high. In 2009 will we be saying, "I wish I had bought in 2007 when everyone else was selling"?

Fabulous New Listing

This beautiful estate home is located on 3/4 of an acre at the end of a cul-de-sac in the heart of Sarasota, nestled among majestic oak trees with a fenced yard for complete privacy. The wonderful two story open floor plan exudes elegance and charm. If you love to entertain, you will not be disappointed with this home! Double French doors lead to the expansive covered veranda that boasts a fabulous new stainless steel outdoor summer kitchen complete with infrared grill, refrigerator, sink, and more. The newly remodeled gourmet eat-in kitchen includes granite and stainless steel appliances.

This home is located in the Torreya subdivision which is next to Hidden Oaks off Bahia Vista.

View the Virtual Tour or see more pictures of this lovely Sarasota home.

Florida’s Single-family Housing Market May Have Bottomed

The Bergstrom Center for Real Estate Studies, Warrington College of Business Administration at the University of Florida conducts surveys quarterly. UF’s Survey Research Center asked a series of questions of 318 industry executives, real estate lawyers, market analysts, title insurers, financial advisers, market research economists, real estate scholars and other experts in the field.

The most important finding from the January round of our Survey of Emerging Market Conditions is that residential development may have bottomed out. Given the scale of the residential development market, this would be good news for all real estate markets and for Florida in general. Meanwhile, most other real estate markets are stable, if not improving, giving a sense that almost all is nearly well in the land. An exception may be condominium markets and apartments for condo conversion that continue to struggle, though they, too, are perceived to be improved.

“If you’re thinking of buying a house, there’s probably not much to be gained by holding out at this point,” said Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “It doesn’t look like prices are going to fall anymore.”

The quarterly survey of experts in the real estate industry completed in January shows that the share of respondents observing a drop in single-family housing prices has dipped, while a growing number find prices staying even with inflation, Archer said.“We see that as a benchmark,” he said.

“When prices maintain the same level as inflation, then we’re probably in some kind of equilibrium. It indicates the market is stabilizing.”

The exception is condominiums, which are overbuilt and prone to speculative and naïve investors, he said.

Source: Bergstrom Center for Real Estate Studies - Warrington College of Business & Newswise

Sellers , Realtors and everyone else involved in the real estate industry obviously welcome this good news. It is great to see it come from a reliable source - Warrington College of Business at the University of Florida. The survey had 318 participating real estate professionals, with an increasingly broad coverage of thirteen urban regions in the state and fifteen property types.

The Sarasota real estate market went from one extreme to another in a short period of time. We had an extreme sellers market and quickly went to an extreme buyers market. Neither condition can last forever. The fundamentals are still pretty good and with property insurance and tax relief on the way they will get even better.

Condo resales turning into buyer's market

Here is a link to a recent article about downtown Sarasota condos and the remorse many of the original buyers have. The article discusses the current climate of the Sarasota condo market, mostly in the downtown area. Obviously, with the slow down in the real estate market and condo construction boom over the last few years there are plenty of new and wonderful condominiums to choose from. If you want to buy a downtown sarasota condo for personal use you will probably never have so many choices.

Some of the buyers who purchased from the developer a few years ago are walking away from the deposits. The list of local high-rises where buyers are walking away from deposits or offering their units for resale includes Alinari at Rosemary Place, a 17-story building on Tamiami Trail; Broadway Promenade, which will feature 187 units when completed on U.S. 41 at 10th Street; Rivo at Ringling, a 15-story, 106-unit tower at Ringling Boulevard and Osprey Avenue; and Kanaya, a 35-unit tower on Orange Avenue.

The article paints a pretty bad picture for the downtown condo market. There is a large supply of inventory but it is a very desired area. I get a few requests a week from people who are interested in downtown real estate. A lot people want to buy downtown but have delayed their purchase because they were unsure what prices were going to do when all of these condo buildings finished. Waterfront and downtown are the two most requested locations for 2nd home buyers. The end users are out there but just apprehensive about buying for fear of lower prices. Good properties, priced competitively will see action.

Property insurers to reduce rates

Regulators say the cost of coverage will fall up to 35 percent in local counties.

Homeowners in Southwest Florida will see property insurance rate cuts of up to 35 percent from the state insurance reform law.

Insurance companies are expected to adopt the lower rates effective June 1.

Average rate cuts will run from 21.1 percent in Sarasota, Manatee and Charlotte counties to as high as 34.5 percent in Sarasota and Manatee and 35.9 percent in Charlotte, state insurance regulators said Thursday.

The statewide average will be 23.9 percent, according to the Office of Insurance Regulation.

Source: Sarasota Herald Tribune

This is positive news for the Florida real estate market. The property tax issues will have to be addressed at some point as well. Perhaps this will help start the bottoming out process for the market. Lower property taxes, lower insurance rates and lower home prices will eventually lead to a more balanced real estate market.

Sarasota Home and Condo Inventory Levels - March 2nd

Inventory levels have not changed much since the middle of Febuary. Hopefully, we are the inventory peak. Most of the sellers who put their property up for sale because of seasonal reasons should have done so already. With properties going under contract and those properties expiring without selling we probably will see some declines in inventory levels as we move towards the middle of the year.

February Statistics
332 single family homes went under contract
189 condominiums went under contract
164 single family homes closed in February
187 condominiums closed in February

The above statistics are for Sarasota, Lakewood Ranch, Lido Key, Longboat Key, Bird Key, Siesta Key, Casey Key, Nokomis and Osprey.