I recently took a bike ride with my wife through the Lakewood Ranch Country Club. It was the early evening and the scenery was absolutely stunning. I was amazed at the tranquility and quiet luxury of the whole setting. With prices in the gates of the Country Club spiking 40% in the past year, I am interested in the demand for other East County luxury communities. With the Concession going in and already being built, (homes in Nicklaus Manor start around $2.2 Million) and the Lake Club getting under way, this is sure to be a hotspot for many years to come. Sarasota continues to see high demand for a luxury product without the insanely high dollars per square foot of the barrier islands.
The Lake Club will be a new luxury enclave with over 700 homes and 300 carriage homes and condos. Set in a similar setting to the Country Club, the Lake Club will be luxe community with golf and all the amenities. Homesites are now available for between $200,000 and $800,000 with the prices likely to increase as sales continue. If I was looking for a luxury preconstruction home in Sarasota away from the water, the Lake Club would be where I would start.
Monday, October 17, 2005
Monday, October 10, 2005
New Condo Conversions on the Horizon
In a continuing trend that just never seems to tire investors, three more apartments are being converted to condos. Village West in Bradenton was purchased for $2.5 million- or $92,500 per unit for the 27 unit complex. Sugartree Village Apartments in Sarasota will also be converted. This property was purchased for $15.6 million- or $77,600 per unit for the 201 unit complex. Saddle Creek apartments off of 26th Street in Bradenton will also be converted, giving the nudge to the residents of the 272 unit complex if they choose not to buy. As affordable housing becomes more and more scarce, we can expect these condo conversions continue until investors start losing money. However, based on the prices above, it is not hard to see how the conversion business is extremely lucrative. Buyers of the large complexes are filling a need in Sarasota right now- giving housing and ownership to lower earning families.
Thursday, October 06, 2005
New Condo Development Opens for Sales: Serenata
In my capacity as an agent, I am constantly getting calls from investors who want to be the first to buy in new developments. Well, one just opened for sales last Sunday called Serenata. Heres my take- the property is nice but exposed to a lot of commercial activity. The units are attractive and look similar to apartment buildings with the prices ranging from the 200s to the 300s. The upsides are the location and the fact that there are no investor restrictions except that you can only purchase two units. The downsides are the the 2% developer cost added to the price and the high monthly maintenance fees. This property is a great example of my point that developers are not stupid- meaning these units are priced at the upper limit of what the market will bear. They will also be released in phases to maximze sales dollars. I really like Serenata for someone who needs a cheaper condo in Sarasota. For investors Serenata looks tight pricewise, but may be a good shot for a longer term hold. After all, we have not seen any new construction condo releases in this price range for quite some time. Also, the rental restrictions are lax, which is a positive for investors. For more info, shoot me an email.
Market Snapshot: Lakewood Ranch Single Family Homes
If you've lived in Sarasota for any amount of time, you have surely heard the buzz about Lakewood Ranch. I am becoming more and more interested in this area for several reasons. The first is that the land is absolutely gorgeous. This masterplanned community has done a great job with conserving wide open spaces for everyone to enjoy. The second reason is that commercial development has finally caught up with residential sprawl. With the much anticipated opening of Main Street and the shopping center coming soon, finally all the residents of the Ranch will not have to drive far for high-end dining and retail. The numbers for the last year are solid:
September 2005
New Listings: 67 Sales: 32 Average Sale Price: $522,953 Average List Price: $682,364 Average Days on the Market: 72
March 2005
New Listings: 53 Sales: 48 Average Sale Price: $ 456,247 Average List Price: $ 701,029 Average Days on the Market: 76
September 2004
New Listings: 32 Sales: 26 Average Sale Price: $ 580,562 Average List Price: $610,553 Average Days on the Market: 116
Inventory is up just like everywhere else, but I do not see this as a problem. Its more of an opportunity. Great developments like the Country Club will continue to hold their value and appeal for many years to come, especially with the arrival of many other high end developments further east like the Concession and the Lake Club. For information on these areas, email me at drew@srqlife.com.
September 2005
New Listings: 67 Sales: 32 Average Sale Price: $522,953 Average List Price: $682,364 Average Days on the Market: 72
March 2005
New Listings: 53 Sales: 48 Average Sale Price: $ 456,247 Average List Price: $ 701,029 Average Days on the Market: 76
September 2004
New Listings: 32 Sales: 26 Average Sale Price: $ 580,562 Average List Price: $610,553 Average Days on the Market: 116
Inventory is up just like everywhere else, but I do not see this as a problem. Its more of an opportunity. Great developments like the Country Club will continue to hold their value and appeal for many years to come, especially with the arrival of many other high end developments further east like the Concession and the Lake Club. For information on these areas, email me at drew@srqlife.com.
Monday, September 26, 2005
Market Snapshot: Central Sarasota Single Family Homes
Central Sarasota has always been a hot spot due to its proximity to beaches, doctors, shopping and great schools. These statistics should give a glimpse as to what the market has done over the last year. Perhaps the most shocking number to consider is that the average sale price of a central Sarasota home has increased 57% in one year. For you locals, the area that I am considering to be central Sarasota is the square between Fruitville Road and Central Sarasota Parkway, sandwiched by US 41 and Interstate 75. Here's the numbers:
September 2005
New Listings: 219 Sales: 106 Average Sale Price: $395,924 Average List Price: $421,247 Average Days on the Market: 76
March 2005
New Listings: 196 Sales: 173 Average Sale Price: $323,457 Average List Price: $397,142 Average Days on the Market: 68
September 2004
New Listings: 232 Sales: 173 Average Sale Price: $252,047 Average List Price: $267,913 Average Days on the Market: 101
Notice that new listings this month double the sales so far! Talk about a correction! Buyers can relax a little bit and enjoy a more powerful situation in the market and the negotiating process. If you have been contemplating a buy in the Central Sarasota market, now is a great time to consider making your move.
September 2005
New Listings: 219 Sales: 106 Average Sale Price: $395,924 Average List Price: $421,247 Average Days on the Market: 76
March 2005
New Listings: 196 Sales: 173 Average Sale Price: $323,457 Average List Price: $397,142 Average Days on the Market: 68
September 2004
New Listings: 232 Sales: 173 Average Sale Price: $252,047 Average List Price: $267,913 Average Days on the Market: 101
Notice that new listings this month double the sales so far! Talk about a correction! Buyers can relax a little bit and enjoy a more powerful situation in the market and the negotiating process. If you have been contemplating a buy in the Central Sarasota market, now is a great time to consider making your move.
Market Snapshot: Longboat Key Condos
One of my favorite niche markets in Sarasota is the Longboat Key Condo market. This market is one that has a wide variety of properties, all with close proximity to one of southwest Florida's most pristine beaches. My data here shows me that the pace of sales is slowing in most areas of our market right now- including Longboat Key. Keep in mind that these statistics include all of Longboat Key, and are for condominiums only.
September 2005
New Listings: 38 Sales: 20 Average Sale Price: $955,450 Average List Price: $936,039 Average Days on the Market: 124
March 2005
New Listings: 55 Sales: 55 Average Sale Price: $947,346 Average List Price: $1,111,645 Average Days on the Market: 136
September 2004
New Listings: 25 Sales: 33 Average Sale Price: $649,415 Average List Price: $716,892
Average Days on the Market: 170
Notice that this month lacks the equilibrium in listings and in sales that caused Sarasota's extreme seller's market over the past couple of years. While prices on Longboat Key continue to hit all time highs, the frequency of these sales seem to slowing. Time will tell if this is seasonal, but after looking at the stats from '04, I would say things are slowing.
September 2005
New Listings: 38 Sales: 20 Average Sale Price: $955,450 Average List Price: $936,039 Average Days on the Market: 124
March 2005
New Listings: 55 Sales: 55 Average Sale Price: $947,346 Average List Price: $1,111,645 Average Days on the Market: 136
September 2004
New Listings: 25 Sales: 33 Average Sale Price: $649,415 Average List Price: $716,892
Average Days on the Market: 170
Notice that this month lacks the equilibrium in listings and in sales that caused Sarasota's extreme seller's market over the past couple of years. While prices on Longboat Key continue to hit all time highs, the frequency of these sales seem to slowing. Time will tell if this is seasonal, but after looking at the stats from '04, I would say things are slowing.
Tuesday, September 20, 2005
The State of the Market
What is really going on in this market? Well, there are several factors contributing to what I see as a general slowdown in the real estate market. Have you seen the signs of a slowing- notice the length of time homes stay up for sale, and open the paper and see how many homes are advertised as "reduced." Typical of this season, the market has slowed down and buyers seem to be a little more scarce than they used to be. I fully expect "season" (October to April) to change things drastically, but I wonder how much of the hype will be residual from last year. Sarasota will remain in heavy demand, but maybe the market will bear a slightly more level playing field this year instead of favoring the seller almost unilaterally.
What does it all mean? Everyone in the industry is trying to catch their breath after a dizzying run. Sellers are realizing that their has to be some logical basis for the price they are charging, and buyers are realizing that the negotiating process does indeed exist. We are going to see a drop in For Sale By Owners and Realtor relevance is going to comeback into the picture. I think Realtors will be needed more for marketing and networking to move housing inventory. Also, over-leveraged investors might be in for some foreclousres if prices don't inflate another 30% this coming year. I would still feel confident to purchase, but buyers need to rethink their strategy if they are banking on huge property price gains again. I hope this is helpful. Email me with your comments, good or bad, at drew@srqlife.com.
What does it all mean? Everyone in the industry is trying to catch their breath after a dizzying run. Sellers are realizing that their has to be some logical basis for the price they are charging, and buyers are realizing that the negotiating process does indeed exist. We are going to see a drop in For Sale By Owners and Realtor relevance is going to comeback into the picture. I think Realtors will be needed more for marketing and networking to move housing inventory. Also, over-leveraged investors might be in for some foreclousres if prices don't inflate another 30% this coming year. I would still feel confident to purchase, but buyers need to rethink their strategy if they are banking on huge property price gains again. I hope this is helpful. Email me with your comments, good or bad, at drew@srqlife.com.
Monday, September 19, 2005
Condo Conversion Blues
I think that sometimes people have a very unfounded sense of confidence when purchasing through a condo conversion. I have sat and watched buyers sign contracts that they have not even read. Just because there are people in front of you in line signing quickly does not mean that you should too. Be careful.
One such example that demonstrates my point can be found in a recent contract I was dealing with. Effectively, once a buyer signs there is no financing contingency or remedy for not being able to get a loan. This means the buyer is making a cash offer with no way to back out regardless of whether they can get a loan or not. Just because the state contract allows for a financing contingency does not mean that a contract from a developer will do the same.
Make sure your agent has had proper time to evaluate the contract you are signing. Sign slowly and make sure that you understand every clause. And remember, just because the developer's lawyer drew the contract up does not mean it cannot be altered. Don't shy away from asking for more, or at least a fair contract.
One such example that demonstrates my point can be found in a recent contract I was dealing with. Effectively, once a buyer signs there is no financing contingency or remedy for not being able to get a loan. This means the buyer is making a cash offer with no way to back out regardless of whether they can get a loan or not. Just because the state contract allows for a financing contingency does not mean that a contract from a developer will do the same.
Make sure your agent has had proper time to evaluate the contract you are signing. Sign slowly and make sure that you understand every clause. And remember, just because the developer's lawyer drew the contract up does not mean it cannot be altered. Don't shy away from asking for more, or at least a fair contract.
Stupid Developers??
I think not. With the state of the current market I am constantly receiving phone calls from investors and home buyers alike who are sold on the idea that anything preconstruction is a great idea. The investors think that it means instant money in the bank at closing time, and home buyers think this is way to get the most bang for their respective bucks. Allow me to differ.....
While many small fortunes have been made in recent months on preconstruction "flipping," the idea that developers sell cheap to complete the development is erroneous. If anything, developers have cashed in on the recent buying frenzy boosting their profits to all time highs. While I do not argue the point that costs have increased to builders across the board, I do take issue with the thinking of many buyers and investors who earmark these products as "good deals." I am currently watching several scenarios play out where investors bought a product from a developer at such a high price that their margins after the flip, coupled with their tax liability from the resale make their efforts look like a waste of time. For the couple thousand dollars they make they should have just taken a vacation instead of sinking money into a low paying investment.
My advice: When you are investing or looking to purchase a residence strategically, don't follow the masses. While many have made money buying straight from developers in the past, I think that the developers are not as dumb as some think they are. They realize that they can sell to end users at a premium, and that's exactly what they are doing. The key to successful investing and purchasing for profit in this shifting market is to be DIFFERENT. I think that there are a lot of sleeper deals out there on existing property that have the potential for profit. So before you rush to sign your life away on a half of a million dollar condo that isn't even built yet, check the markets pulse and look around first. While there are some deals still out there, remember the pop culture adage "fools rush in."
While many small fortunes have been made in recent months on preconstruction "flipping," the idea that developers sell cheap to complete the development is erroneous. If anything, developers have cashed in on the recent buying frenzy boosting their profits to all time highs. While I do not argue the point that costs have increased to builders across the board, I do take issue with the thinking of many buyers and investors who earmark these products as "good deals." I am currently watching several scenarios play out where investors bought a product from a developer at such a high price that their margins after the flip, coupled with their tax liability from the resale make their efforts look like a waste of time. For the couple thousand dollars they make they should have just taken a vacation instead of sinking money into a low paying investment.
My advice: When you are investing or looking to purchase a residence strategically, don't follow the masses. While many have made money buying straight from developers in the past, I think that the developers are not as dumb as some think they are. They realize that they can sell to end users at a premium, and that's exactly what they are doing. The key to successful investing and purchasing for profit in this shifting market is to be DIFFERENT. I think that there are a lot of sleeper deals out there on existing property that have the potential for profit. So before you rush to sign your life away on a half of a million dollar condo that isn't even built yet, check the markets pulse and look around first. While there are some deals still out there, remember the pop culture adage "fools rush in."
Monday, September 12, 2005
SRQ Life Blog Lauches
Thank you for coming to view my blog. For me, this blog represents a place where I can pass on my experiences and opinions- essentially a place where I can give back to the great community that supports me. If you have comments or questions, feel free to email me at: drew@srqlife.com.
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