Fever Pitch: Sarasota Area Real Estate Market Sizzles

By Carol Brzozowski

June 2021—Bidding wars and cash offers have been dominating the U.S. real estate market, and it’s no different in Sarasota, where buyers are snatching up coveted properties in an effort to enjoy the area’s many amenities and favorable weather. 

A year into the pandemic, area real estate inventory remains ultra-tight. Quality of life and favorable tax issues are a prime consideration for those moving in from out of state.

“Both single family homes and condo inventory continues to shrink even as we move past our traditional season,” points out Joel V. Schemmel, J.D., Realtor with Premier Sotheby’s International Realty.

At the close of the first quarter last year, there were almost 5,000 homes available for sale in Sarasota and Manatee counties, says Schemmel. “At the end of the same period this year, there were less than 1,000,” he says. “A very similar change occurred with condos as well.”

Alex Krumm, Broker Owner for NextHome Excellence and current president of the Realtor Association of Sarasota and Manatee, is seeing the same trend.

“Real estate inventory levels are the lowest on record, particularly given the immense demand for home purchases right now,” says Krumm. “In March—the most recent month for which we have complete numbers—we sold more homes than we did in the two previous months of March combined.

“We’re currently operating at about three weeks of available inventory. For reference, the balance point between a buyer’s market and a seller’s market is generally accepted as six months of available inventory.”

The pandemic led to a pivot in the way residences are viewed, with more people now at home for work and children schooling at home. In essence, homes have become an “umbrella” space for living, working, learning, and engaging in recreation. 

Schemmel sees an appetite for more square footage, multiple office/study areas, space for a home gym or exercise equipment, and more and better-designed outdoor spaces. 

“Recently, I have even seen a trend away from having too much of an open concept,” he adds. “People want to have privacy as they work and study from home. These trends play into the luxury market as well, along with the demand for more self-contained resort style homes—an escape.”

Krumm notes that the market is extremely competitive for buyers.

“Multiple offers for homes are the norm, as buyers scramble to bind a home under contract, much less negotiate concessions,” he points out. “Cash is king.  Homes are selling in days, not weeks.”

He sees sellers dictating prices and terms, with buyers are challenged to act decisively in at every price point. “Buyers who don’t act now risk shopping for homes that are dramatically more expensive a year from now,” says Krumm.

Sellers, on the other hand, have a great opportunity. “Those who prepare their home with a sale in mind—painting, wrapping up small projects, and pricing strategically for the market—are more likely to be the beneficiaries of ‘bidding wars’ or escalation clauses that can dramatically increase their net proceeds,” he says. “Marketing a home to the widest audience possible, as realtors do, is the single most beneficial technique to bring maximum proceeds.”

Sustainable and eco-friendly features are desired in residential real estate, but not always a prime consideration. 

“Typically, these features would impact value, but in today’s market in which almost nothing is available, the price benefits of these features are being swallowed by general demand,” Krumm points out. “To borrow a phrase, ‘buyers can’t be choosers’ in a market like this.”

Schemmel agrees that while people “do very much appreciate” sustainability features in a home, “in this very fast-paced market, it is generally not a factor that plays significantly into interest or selling price.  Buyers are just hoping to find a home that meets a majority of their requirements from an overall location and lifestyle perspective.”

What features are impacting a property’s price and desirability?

In the luxury market, energy-saving features are almost a given with automated everything—air conditioning, lighting, sunshades, surround sound, outdoor fiber optic lighting.  

Now most of these features can be controlled from a smart phone or tablet whether you are in residence or out of the area. The increase in automation, with the owner being in charge, provides a greater sense of security. A top priority of home buyers today is security.

— Sharon Gould, Branch Manager
 Longboat Key, Michael Saunders & Company

Why all the excitement about this region?

COVID-19 was the catalyst for countless unconventional trends within the second home industry, including rising primary home purchases and strong sales performances overall. The purchase of a second or co-primary home accelerated in 2020. Homes in vacation markets offer many of the most desired amenities right now—space, natural surroundings, and privacy.

Florida has been a standout, attracting buyers from throughout the U.S., especially those from large cities or high-tax states. Interestingly, we are seeing buyers from the West, including residents from California and Texas — areas which historically have been less active in sending new buyers to our market area. 

An extraordinary combination of circumstances is currently fueling the real estate market here locally.

• After over a year of waiting for a renewed sense of safety, we see life goals being accelerated with housing being at the very top of this list. This is true for sellers as well as buyers. Many sellers are simply changing their lifestyle, from single family to high-rise and vice versa. Downtown Sarasota and all of our beach communities are in high demand as we have emerged from the height of the pandemic.
• In 2019, the market was trending toward lower square footage; this has clearly swung in the opposite direction through 2020, as buyers reprioritized the importance of “space” within the home. 
• Condominium sales are up significantly, with a closed sales increase of 70% compared to the same four months of 2020. This reflects the recent first quarter closing of The Ritz-Carlton Residences.
• The great outdoors and walkability are drivers for our market. 

Today’s historically low inventory speaks more to increased demand than to a lack of homes coming to market. With a very active market, average days on the market drop dramatically. New listings are up year-over-year, but are being quickly claimed by eager buyers.

— Drayton Saunders, President – Michael Saunders & Company