Nobody is Buying in Florida

Untrue!

The Sarasota MLS shows that there are:

733 single family homes under contract
311 condominiums under contract

Contrarian: An investor who buys a category when most others are selling and sells when others are buying. A contrarian doesn’t chase what is hot, but is often buying a category that has recently underperformed.

If you need help buying or selling please contact me at 941-812-6272.

Vulture funds looking at Florida real estate

I have been in touch with a few private equity firms looking to make a bulk purchase of property in the Sarasota area. There are alot of "vulture funds" or "opportunity funds" looking to pick up Florida real estate at depressed prices. They typically seek out hurting condo developers who are sitting on a ton of inventory and make offers to purchase condos in bulk at reduced prices. Once they purchase them they typically rent them out for several years.

The money comes from all over. Basically, these private equity firms or vulture funds are just a group of wealthy individuals pooling their money together to purchase in large quantity. Buying in quantity allows them to get a price discount and better returns on their money. I even read that Jack McCabe, the economist who spoke in Sarasota last week, has created a McCabe Acquisitions LLC to purchase distressed property.

This can be a good thing for the market. In a market like this reducing inventory levels will lead to a more balanced market. Demand will increase because buyers will be less apprehensive about the market.

While our inventories are hovering around a historic high we appear to be in a better situation that south Florida. I recently heard that there were 24,000 condos for sale with another 19,000 new condos scheduled to be completed soon.

Here are a few of the buildings where the developer is still trying to sell units.

Alinari
Broadway Promenade
Rivo on Ringling
Kanaya
Positano
1350 Main
Phillippi Landings
Bel Mare at Riviera Dunes
Promenade at Riverwalk

I am forgetting a few but this is the bulk of them. We appear to be in much better shape than south Florida.

"You can buy Florida real estate at 50 cents on the dollar"

I am a little tired of reading the doom and gloom articles about the Sarasota Florida real estate market. A client from Canada sent me an article from one of his newspapers about the Florida market. Like so many other articles it talks about how bad it is here. I am not saying these reporters are completely wrong. But some of them are blowing things out of proportion. One of them stated that you can buy real estate here for 50 cents on the dollar.

The reason I bring this up is because I had a client over the weekend who wanted to put in a rediculously low offer on a home that is already priced well. When I checked the recently sold homes in the community the home they were interested in was within 10% of those prices. My client wanted to submit an offer of about 60% of list price. After analyzing the recently sold homes in the community he agreed that there was little chance of getting the home at that price.

The December statistics from the Sarasota Board of Realtors show that the average sales price to list price for sold properties is 90%. In November it was 93%. January numbers should be out soon. Over the last year it is consistently between 90%-93%.

I checked MLS for all of the single family home and condo sales in January for Longboat Key, Siesta Key, Lido Key, Bird Key, Casey Key, Lakewood Ranch and Sarasota. In this specific area there were 247 sold properties (don't confuse these numbers with all of Sarasota county).

Of the 247 properties:

6 properties sold from 66% - 74% of list price
241 properties sold 75% of list price or over
81% of the properties sold for more than 85% of the last asking price
59% of the properties sold for more than 90% of the last asking price
24% of the properties sold for more than 95% of the last asking price

It is not all sunshine and rainbows out there but it is not as grim as some believe. Arm yourself with the facts not the opinions of a reporter spouting doom and gloom in an effort to sell newspapers.

Good news:

Currently there are 468 properties under contract in the area I mentioned above.

There are 697 properties under contract in the Sarasota MLS. Not all of the Manatee county transactions are reported in the Sarasota MLS so this number will actually be larger.

Why the snowbirds come to Florida

Up north



Sarasota, Florida


Chicago 11 27

New York 31 39

Atlanta 40 49

Charlotte 35 49

Columbus 31 37

Sarasota 56 75

Canadians looking for Florida real estate

I have not had much time to keep you up to date on Sarasota real estate news as I have been busy with several Canadian home buyers. Take a look at this 5 year chart of the Canadian dollar - U.S. dollar exchange rate. As you can see from the chart the Canadian dollar (Loonie) is hovering around par with the U.S. dollar. The strength of Loonie in conjunction with a depressed real estate market in Florida has caught the eye of our friendly neighbors to the north.

As we were looking at a home today one of them stated to me that "the stars are perfectly aligned for us". I have had the pleasure of working with several home buyers from Canada recently and have many others arriving to look at property in the coming months. Please contact me at 941-308-6491 if you need help finding your next dream home or selling your property in Sarasota.

Florida property tax reform

So far from what I have read I am not impressed with the new property tax proposal. I am all in favor of doing something with property taxes but it seems this new bill misses the mark. I really think rolling back assessed values and portability of homestead is necessary. The current system is unfair to snowbirds and landlords and the new tax proposal does nothing to fix this. The 2nd home owners are here 3 or 4 months a year but have to pay more in taxes than someone who lives here full time. I imagine many of them will get fed up and want to sell. Which leads to even more property on the market and downward pressure on prices. With so many tax plans out there I am surprised they chose this one to support. I guess they were trying to appeal to the voting masses.

The state of Colorado seems to have a good system. In 1992, voters there approved a measure that limited year-to-year increases in government spending to the rate of inflation plus population growth. Any revenues collected in excess of that amount were to be returned to taxpayers. Local governments there can always ask the taxpayers for permission to spend more than the constitutionally prescribed limits. Colorado's model boosts economic growth, which, like Florida, is driven in large part by secondary homeowners. Colorado relies more on sales taxes than property taxes so as not to kill the secondary home market.

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.

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.

Why People Come To Florida in the Winter

Weather highs for Friday, February 9th:

Detroit: High: 21°F - Feels like: 8°F
Minneapolis: 7°F - Feels like -7°F
New York: 31°F - Feels like 17°F
Richmond: 39°F - Feels like 31°F
Newark: 32°F - Feels like 17°F
Columbus: 22°F - Feels like 10°F
Boston: 28°F - Feels like 13°F
Chicago: 19°F - Feels like 5°F

Sarasota: 72°F - Feels like 72°F

The Concession wins award for best new private golf course

Golf Digest has recently named The Concession as the best new private golf course in the country.

The concept began in 2002, when British-golf-hero-turned-Sarasota-resident Tony Jacklin read that developer Kevin Daves was planning a Jack Nicklaus-designed course in the area. Jacklin, champion of the 1969 British Open and 1970 U.S. Open and four-time European Ryder Cup captain, called Daves and said he wanted to be involved. Over a subsequent lunch, Jacklin suggested the club might have a Ryder Cup theme and gave Daves a photo for the clubhouse. It depicted Jacklin and Nicklaus in 1969, moments after Jack had conceded a par putt to Tony that resulted in the first tie in the history of the Ryder Cup.

Daves saw more than a photo. He saw a marketing scheme. He'd call his course The Concession. He'd use a silhouette of the photo as his logo. He'd have Jacklin work with Jack on the project.

Go to my Concession page to see all of the homes for sale. Give me a call if you would like to see any of them 941-812-6272