There is a misconception that prices are continuing to fall. If you watch national news stories, that is some of what you see. However, those reports fail to take into consideration the most important rule in Real Estate â€˜Location, Location, Locationâ€™, and that all real estate markets are LOCAL: The situation in Chicago is not relevant to Boise or to Dallas etc. Also, certain segments of the market within a local area can experience vastly different trends: i.e. condos vs. single family homes, or price points: under $200,000 vs. multi-million $ properties.
More specifically, for the purposes of this question I will focus my response to market conditions on Siesta key.
As a Realtor that specializes on Siesta key, I have been told â€˜Iâ€™m waiting for the bottom of the market before I consider buyingâ€™ many times. As a former licensed property appraiser, I decided to compile hard data on the local market to determine when that was / or will be (see the link below for the results)
On Siesta Key, a 12 month trailing average of sales prices through March 2012 indicate the market has been improving dramatically for single-family homes since the slow-down. According to the average sales price data (compiled from the Sarasota MLS): It appears the bottom of the market for Siesta Key single family homes was approximately two years ago. Although I have not updated this data lately, more recent reports indicate that sales have continued to strengthen throughout June
Condo prices remain flat, but this is consistent with the observation that even within a specific market area â€“ different segments (i.e. condos vs. single family homes) can experience different conditions concurrently. However, it should be noted that unit sales of condos are up significantly.
Regarding the instability of Europe and the world markets, even in these uncertain times that we live in, the US is still the most attractive country for investment (the proverbial â€˜dog with the least amount of fleasâ€™). This is supported by the fact that US Treasury bills are still being snapped up in spite of historically low interest rates. However, international investors are not satisfied with safety alone â€“ they want return on investment, which T-bills do not provide. This would explain the recent data that over 30% of all real estate transactions in Florida involved foreign buyers, and that number is expected to grow.
Fears of inflation are also fueling the rise in prices. Like gold, oil, and commodities, real estate is a finite (limited supply) â€˜hardâ€™ asset. During periods of inflation, the value of hard assets (including real estate), tend to go up as inflation rises. There is a counter to this discussion that as inflation rises â€“ so do mortgage interest rates â€“ and that exerts downward pressure on home prices. However, on Siesta key (remember this is a discussion about local markets), most recent transactions are cash in spite of historically LOW interest rates. In addition, inventory levels on Siesta key (and greater Sarasota) are within the range of what is considered to be a â€˜sellers marketâ€™ (i.e. at current sales volume it would take less than 6 months to sell every home). This is an indicator that future prices are expected to rise.
If you are seriously considering buying in Sarasota or on Siesta Key, now would be the time to begin looking in earnest, as all indicators point to prices continuing their upward trend in our local market.
If you have any questions, or would like a customized search for all properties specific to your criteria â€“ call or email me for more information.
Coldwell Banker Residential Real Estate
5145 Ocean Blvd
Siesta Key, FL 34242
For the latest Market News and info go to my website:
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