By Budge Huskey
Chief Executive Officer
Premier Sotheby’s International Realty
Homes in all price ranges in Sarasota and Manatee counties are in high demand, yet the larger the sticker price, the bigger the jump in sales activity.
As the pandemic emerged one year age, home sellers and their Realtors across the market feared the imminent demise of their expectations and began putting plans on hold. Count me among them, despite my optimistic nature. So here we are, twelve months later, with comparisons surfacing between toilet paper and housing in terms of scarcity and memes circulating daily on social media reflecting sellers as kings and queens flashing up or down thumb decrees on the multitude of bids from the peasant buyer class. Normal times they are not.
March will prove one of the strongest months in the history books for real estate sales both on a national and local level, further depleting available housing inventory to all-time lows. With the natural economic principles of supply vs. demand engaging, we are witnessing a renaissance in real estate values beyond the imaginable. The average sold price for real estate in Sarasota and Manatee Counties together increased almost 35% year-over-year in March, with Sarasota County alone approaching 50% ($613K vs. $417K)! This rise is unlike anything witnessed before, and that includes the go-go days of 2004-2005 before we watched in dismay as the bottom fell out.
Now before anyone runs to the bank for a home equity loan based on their newfound wealth, it’s worth noting that home values in the market have indeed risen well beyond the norm and your residence has possibly never been worth more, yet much of the recent spring in average sales prices is attributable to the impact of price stratification. Homes in all price ranges are in high demand in our present world of frenzy, yet the larger the sticker price, the bigger the increase in sales activity on a percentage basis, In fact, during the first quarter of this year in Sarasota and Manatee Counties, homes priced in excess of $1 million sold at a staggering 87% rate above last year. Along the entire gulf coast of Florida, multiple, competing offers on uber-luxury homes is a daily occurrence with the inclusion of escalation clauses in offers becoming almost commonplace. emotions are elevated, with negotiations fierce.
It is easy to describe our present real estate conditions as a boom, but that would suggest a bust must at some point follow. Real estate has always forged a cyclical path, with the words “buyers’ market and seller’s markets” known by all and depicting who holds the advantage at what point on the curve. We have been here before and instinctively seek comparisons, yet this one is truly different.
This is real demand, based on real money, by real people. and it will continue long after the last have been vaccinated and normalcy returns to daily lives everywhere. Notwithstanding the appreciation witnessed in past years, one may argue that homes in our market remained undervalued in relative terms. With an average annual increase in sales prices of approximately 6% from 2015 through 2019 in Sarasota, one could surmise that we are simply playing catch up and only now realizing our true potential. Accordingly, it is perhaps more appropriate to describe our present circumstances as a positive price correction. A reset, if you will, only with longevity.
The value trend is welcome news for homeowners across our market, and a significant contributor to the record-breaking household net worth in the country today. Of course, one must appropriately acknowledge it presents even further challenges for those seeking the dream of homeownership and the chasm between the demand and supply of affordable housing.
In the end, what we thought of values in our market must now be rethought. and this is true for both existing homes and the perceived limits on what developers may obtain for future new construction.
Budge Huskey is chief executive officer of Premier Sotheby’s International Realty.
Charts for Sarasota and Manatee counties prepared by Premier Sotheby’s International Realty with data from Stellar MLS deemed, but not guaranteed, to be 100% accurate.