Finally A Decent Piece of Journalism

Most of you who subscribe to our local newspaper have probably had it with negative real estate reporting in the news. I know I have- so Kenneth Hearney's article in last Sunday's paper was a welcome moderate voice, even if we did have to rely on the AP for some good reporting. The article concludes by stating that a lot of the recent news media rhetoric has been superfluous and severe. Hearney's conclusion is that this faulty rhetoric, while terribly effective at selling papers, really cripples the market in the long term. I share this sentiment with him.

People always ask me where I see the market going... so here goes.

The U.S. economy is in an interesting position- the Dow is hitting record highs, unemployment is low, oil prices are down, and the long term interest rates have slowly been falling each week. Also the luxury housing market is very strong. All of these externals lead me to believe that serious buyers and sellers don't need to sweat the larger forces of the economy. Although we are in a correcting market I think we are seeing greedy and frivolous investors get what was coming to them. These are the true horror stories- otherwise I think things are getting back to normal. Normal means that the drastic 30-40% run up in prices is easing back to the normal patterns of what prices would have increased to incrementally without the boom. The day to day vicissitudes of being a real estate practicioner model to me more of a correction than a bust.

More Growth for Lakewood Ranch

Despite the slowing real estate market Lake wood Ranch is planning for more massive future growth. I was astonished to learn that SMR is planning to add over 8,000 more homes north of State Route 70 in South Bradenton. In an effort to make Lakewood Ranch a more autonomous community the focus will be on growth not only in residential units, but also in commercial and industrial sectors as well. Although building is not supposed to start until next year, and build out wont be until 2019, this news is a bit surprising since much of Lakewood Ranch is for sale right now. This shows us that big developers are still buying into the long term viability of the Sarasota Real Estate Market. One thing that you can bet on about this new development is that much of it will be "affordable" in comparison to other Lakewood Ranch areas. For those who enjoy the Lakewood Ranch lifestyle, now is a great time to buy. A source at Neal Communities told me about a new community in the Country Club that is starting in the $380's- a very modest price for the luxury that lies behind the gates.

Negotiating Tips- Be Courteous and Get More

I had a past customer of mine call the other night. She was in a panic and trying to negotiate a real estate deal that she and her agent were working on up north. In most parts of the country we are dealing with a much different market than a year ago and people who bought and sold in the boom are now finding a new paradigm coming into play when negotiating in a tougher market. Her dilemma was complex- she was a seller trying to muddle through the details of a very bad offer with many contingencies and complexities clouding what even the final sale would net my past customer.

I have another acquaintance who is working with an agent and is trying to buy a house in Sarasota. His agent is helping him write several insulting offers a week which are being met with mixed levels of resentment, rage, or indifference.

Both of these scenarios highlight a negotiation technique that is rooted in both common sense and decency: Focus on one goal in your offer. Sellers are feeling the heat of this market and will more often bite on a clearly written offer with a lower price than one with all sorts of confusing contingencies and negative clauses for the seller. Try not to insult already suffering sellers and put together a good offer with realistic terms and really go for it on the one front your are trying to gain ground on. Usually it all revolves around the lowest price so make sure that price is in the range of reality and go for it- but show the seller you are a solid buyer by offering solid terms and as few contingencies as possible. I have seen this technique be successful for both buyers and sellers as it eliminates the confusion of a messy offer.

Let's Go Buy Some New Construction

Well, builders seem to be sucking wind this season. Before I can get any real work done each day, I have go through and delete all the builder incentive emails that I am getting. While I do appreciate the sales incentives, the true advantage lies with the buyer. A year ago, you were lucky to get on a waiting list. Today, you can walk in and buy and inventory home at a greatly reduced price with many upgrades at "no charge." If you are condsidering the purchase of a resale home, you might be better off looking in the same area for something new. You will most likely be surprised at what you can get. Give me call or shoot me an email for some ideas. Mail to: drewrussell@michaelsaunders.com.

More Palmer Ranch Statistics

Well, there's always good news and bad news- and they usually come together. The GREAT news that as a whole, the MLS pended sales for last month were 430, a level equal to last January when the market was totally different. That is a great sign of the vibrance of our market. While we are seeing the same level of buyer activity, listings are taking a great deal of time to sell with over 4 times the inventory of last year!

Here are some more comparative stats, and the essence remains the same: While sale prices are up, so are listings. Total sales are down for the year despite recent signs of a healthy resurgence.

These stats are comparative for 1/1 to 4/31 for 2005 vs 2006.

Palmer Ranch Single Family Homes

Total Number of Listings Taken: 2005: 175 2006: 327 Up 87%
Total Number of Sales: 2005: 138 2006: 81 Down 41%
Median Sales Price: 2005: $416,750 2006: $499,900 Up 20%

Palmer Ranch Condominiums

Total Number of Listings Taken: 2005: 146 2006: 259 Up 77% (flippers beware)
Total Number of Sales: 2005:100 2006: 62 Down 38%
Median Sales Price: 2005: $272,775 2006: $282,500 Up 2%

Another Outstanding Siesta Key Property

I just listed a very interesting and historic Ruth Richmond home on Siesta Key. This home was built in 1971, and has been relatively untouched by its original owner. It is a three bedroom, two and a half bathroom home located on a Siesta Key Canal. On over a third of an acre, this home could be torn down, or would be perfect for restoration. Only one bridge separates the owner from the Bay. The property is being offered at $999,000 and for more information, shoot me an email.

Palmer Ranch Market- First Quarter '05 vs. '06

Here are the Palmer Ranch statistics as a comparison point between the first quarters of 2005 and 2006:

Residential Single Family Homes

Total Listings Taken : 2005- 143, 2006- 257 Up 80%
Total Number of Sales: 2005- 100, 2006-62 Down 38%
Mediam Sales Price: 2005- $415,250 2006- $502,500 Up 21%

Condominiums

Total Listings Taken: 2005- 96, 2006- 205 Up 114%
Total Number of Sales: 2005- 71, 2006- 42 Down 41%
Median Sales Price: 2005- $275,550, 2006 $282,500 Up 3%

Summary: Its a great time to be a buyer as we continue to see inventory accumulate. Its an unbelievable sitaution for buyers as sellers are seriously looking at all offers. In the condo sector, opportunity abounds as modest appreciation rates and improved condos are reselling for a modest investment return.

Outstanding Siesta Key Opportunity

I went out to eat last night at one of my favorite local restaurants, and was amazed at how many out of state license plates were clogging up the parking lot. Never in my life have I seen Sarasota this crowded with the influx of tourists. Siesta Key is bustling with life, which leads me to my point. I have just listed an outstanding 6th floor condominium in Harbor Towers which offers great investment potential. In peak season the rent will gross the owner over $4000.00 monthly. While cashflow properties on the Key are all but extinct, this unit is being remodeled and offers a way to invest in waterfront real estate in Sarasota with a nice opportunity to recoup out of pocket expenses. Send me an email to learn more.

Sarasota's Luxury Market

For months now I have been telling people that the high-end market in Sarasota is going to be less susceptible to the impending "correction" than other market sectors. The investors that I have had the pleasure of working with over the past year will tell that I always counseled them to avoid multiple "small" deals and pursue the market segment above the million dollar mark. The reasoning behind that is simple- every mom and pop operation in Sarasota and from everywhere else it seems invested in condos and lower end homes to flip. Speculation in the high end market is also fierce, but by virtue of the numbers, there are simply fewer players on the investment side. In a market where sales are slowing, I have long seen and forecasted that our luxury market would not feel as much of a correction as other market segments. No one can argue that inventory in the luxury sector is up greatly over last year, but what is impressive is that benchmark sales are occurring with some regularity.

Take for example these recent sales:
A home sold this week on Westway Drive on Lido Key set a regional record for a sale of a home on a single parcel- the home sold for $13.1 million dollars and both sides of the deal were handled by my firm, Michael Saunders and Company. Our office also has a very dominant presence on Casey Key which has been the subject of many discussions about the vibrance of the local real estate market. A deal recently went pending in my office for the sale of a Casey Estate that has a list price of 10.5 million dollars. There are currently 20 pending sales of properties valued from $3 million to $14 million in the Sarasota MLS, a bold statistic in a faltering market.

There are many reasons for this, but one is that buyers from markets like California and Naples are realizing the opportunity that Sarasota provides- and that luxury estates here are still priced fairly well- especially in a "buyer's market."

What's up with Zillow.com?

When my grandmother called me to tell me about a real estate website, I almost had a heart attack. This is my generation- the generation of technology... despite the shock, I checked the site out and think it is a pretty cool concept- one I surely wish I had come up with. It seems that some wonder if real estate agents see Zillow as an impediment or competition to our jobs. Questions the Sarasota Herald has been asking seem to indicate this.

Zillow is good in moderation, but what people have to realize is that it is a new site, and that the comparable sales are generated and picked by computer. I tried about 10 properties out and found Zillow to be a good bit off. To its credit, it was right on two parcels. Before you try to sell your based on the figure Zillow spits out, consider a few things:

1. Computers do not have nuances programmed in. Is your house on a corner lot? Does is have granite countertops? You get my drift.
2. Everyone in any given neighborhood know the general prices homes have been going for. Zeroing in on the exact dollar amount is more tricky.
3. Some of the comps Zillow found for me were months old. For instance I bought my home over two months ago and it was not updated. The market looks much different today than it did months ago.

My advice: Zillow in moderation- and consult an agent or appraiser if you want a more accurate price.

Palmer Ranch Market Update First Quarter 2006

Despite the external signs of the shift to a drastic sellers market, home and condo values are still on the rise in the Sarasota market in 2006. How ever, there is over 15 months of condominium inventory in the Palmer Ranch Market. Transactions are slowing, but market prices are maintaining their robustness with a very strong upward surge in Palmer Ranch home values- to the tune of 34%!

Here are the statistics:

Residential 2006 2005 Change
# of Listings Taken 161 80 Up 101%
# of Sales 28 54 Down 41%
Median Sales Price $557,500 $432, 500 Up 34%

Condominium
# of Listings Taken 156 60 Up 160%
# of Sales 18 35 Down 49%
Median Sales Price $284,950 $270,000 Up 6%

Even in a shifting market home ownership seems to pay a lot better than the bank. A word of advice to sellers. BE REALISTIC. Take a look up and down the street. If you see multiple For Sale signs, the market is competitive. Ask yourself what is that will sell your home. The answer is value. Buyers determine value by comparison shopping. Make sure your house stands out and priced well per square foot. No matter how much you advertise, if your house is overpriced, it will not sell. If you are wondering what your home is worth and how to get it to sell more quickly, give me a call or email me: drew@srqlife.com.

City Place at Pineapple Square- Sure to be a Good Bet

As one who did his undergraduate work in Palm Beach, I feel that I can speak with authority about the City Place concept- after all I spent a lot of my time there- eating at Cheesecake Factory, visiting at Starbucks, or studying at Borders. One of my former professors bought a condo at City Place in West Palm Beach and has seen tremendous appreciation on his purchase. I am excited about Sarasota getting a City Place for many reasons- and I think that Sarasota's version may even be more luxurious due to its proximity to the water. City Place will have condominium residences located convenient to the arts, entertainment, fine dining, and high-end retail. Preconstruction pricing is available now from the $400's to the $900's. Shoot me an email to drew@srqlife.com for more information on this up and coming Sarasota hotspot.

Downtown Skyline to Continue Significant Changes

Despite gloom and doom forecasts by some of the regions leading economists, some downtown Sarasota developers continue to see the silver lining of the local luxury market. Two more buildings will be added to the frequently changing Sarasota skyline- The Grande Sarasotan and The Marquee on the Bay. Both buildings are going to be centered on larger and fewer units and gunning to fetch over $3 Million for each unit. Both buildings, located in close proximity to Sarasota Bay will offer great views and will focus on the luxury niche. My appreciation for the diversity and luxury of Sarasota's downtown area continues to grow. With areas like Golden Gate Point and buildings like these, Sarasota will continue to become more and more of a Florida Landmark. For more information about these exclusive residences, or what's going on downtown, shoot me an email- drew@srqlife.com.

Palmer Ranch Market Update

Palmer Ranch has always been an outstanding place to call home in Sarasota. Its county club feel, combined with close proximity to beaches and shopping make it a prime place to live. The Palmer Ranch market continues to show signs of robustness, especially in the single family home arena. So for those who want to know, here are some 2005 Palmer Ranch comparative stats:

Single Family Homes:

March 2005-
New Listings: 60 Sales: 43 Average Sale Price: $475,418 Average List Price: $521,163 Average Days on the Market: 69

September 2005
New Listings: 53 Sales: 31 Average Sale Price: $564,337 Average List Price: $655,656 Average Days on the Market: 74

December 2005
New Listings: 41 Sales: 22 Average Sales Price: $653,789 Average List Price: $602,245 Average Days on the Market: 115

Summary: Although the listing inventory is accumulating, sale prices show strong growth resulting in almost $175,000 in average sale price growth in the last nine months.


Condominiums: (A Different Story)

March 2005
New Listings: 34 Sales: 34 Average Sale Price: $297,933 Average List Price: $284,244 Average Days on the Market: 136

September 2005
New Listings: 46 Sales: 31 Average Sale Price: $281,144 Average List Price: $281,144 Average Days on the Market: 197

December 2005
New Listings: 44 Sales: 17 Average Sale Price: $299,163 Average List Price: $304,595 Average Days on the Market: 86

Summary: What the data shows is a more stagnant condo market but this data is skewed due to over speculated condo projects in the area such as Arielle and the Serenade. There are very nice condos showing consistent stable growth in places like Prestancia and Stoneybrook. Shoot me an email with any questions.

I Agree

RISMEDIA, Jan. 11 — The key word for the housing market in 2006 is balance, with a return to a more normal rate of price growth, according to the National Association of Realtors®. David Lereah, NAR's chief economist, said current trends in the housing sector are healthy. "We don't need to break a record every year for the housing market to be good – in fact, cooling sales are necessary for the long-term health of this vital sector," Lereah said. "A modest slowdown in home sales, coupled with improvements in housing inventory, means the market is in the process of normalization. That will help to bring balance between home buyers and sellers, yet sales will remain historically strong."

What's Really Going On?

I wish a Happy New Year to the followers of my blog and apologize for the brief respite from publishing my opinions. You might notice a newer look to the website, and note that I striving to make drewrussell.com a more comprehensive and relevant Sarasota real estate information source. The holidays were good this year for most Sarasota investors who tried their luck in the market and sold in 2005. Many investors who bought lower end condo conversion properties in mid to late 2005 are now sitting nervously waiting for the next mortgage bill to come OR a phone call with good news from their agent.

My volume of seller phone calls has increased as of late and I am enjoying working with savvy sellers who realize that the market is not crashing. The key to selling a property right now is staying within the realm of comparable sales and not being greedy. I can attest from multiple sources that the market is picking back up, but with more picky buyers and "value" priced homes. I am constantly barraged with emails from agents and sellers offering ludicrous agent bonuses and buyer rebates on their overpriced homes. If you are thinking about selling be realistic and consult an agent you trust for an accurate opinion of value. If you are buying, now is a great time to buy. Look for discounts off of list prices, but be sure to understand the value of the market is not going to crash- so be fair.

Investors have the most to consider right now. And I will return to my stump and counsel them to focus on uniqueness. Absolutely do not buy a cookie-cutter condo on speculation right now. Most developers are fetching market price and the easy flip now becoming as elusive as the perfect NFL season.... More to come, and thanks for reading!