Better weather on the Keys (By Raul Elizalde, 9/07)

A significant improvement in the market for Siesta Key and Longboat Key condos bodes well for sellers.

Despite doom-and-gloom media coverage and serious problems in the mortgage front, real estate market conditions in Sarasota have undoubtedly improved compared to last year. More sales are taking place and the number of condos and homes for sale in Sarasota has gone down. This reversal of fortune is quite clear in the Longboat Key condo and Siesta Key condo markets.

The number of condos for sale on Siesta Key went down by more than 10% to 545 at the end of July from a peak of 620 during February. Condos for sale on Longboat Key declined over 16% to 420 from the March high of 503. At the same time, monthly sales increased on both Keys: the number of condos sold on Longboat roughly doubled, while on Siesta it almost tripled compared to the extra-sluggish months of 2006.

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Sarasota Real Estate Insights: Longboat Key Condos

A condo-by-condo view of the Longboat Key condo market .
(By Raul Elizalde, 2/07)

When looking at real estate market conditions, it is often useful to look at the big picture. Sometimes it is best to look at the Sarasota real estate market as a whole, or at the entire Sarasota condo activity. Many times it is better to narrow it down, to the Siesta Key single-family home activity, or the luxury condo market, for example. But when properties are lumped together, some of the details that are often crucial to a good understanding of the market are lost. There is always a trade-off between looking at details and getting a sense of the big trends.

This newsletter issue, unlike many of the past issues, takes a closer look at the details. I focus today on the Longboat Key condo market on a condo-by-condo basis. I have looked at twenty-six different condominium complexes accounting for about 50% of all the Longboat Key condos for sale.

The picture that emerges from this study is that there is a very wide span of sales, turnover and inventory among these condos. Aggregate figures do not account for this variety.

	For Sale	Sales last 12 months	Inventory (months)	Turnover
Players Club	2	4	6	3.0%
Promenade	8	9	11	8.0%
Fairway Bay Atrium	5	5	12	5.4%
Beaches	5	5	12	6.8%
Aquarius	3	3	12	5.3%
Vizcaya	2	2	12	6.5%
Tangerine Bay	6	5	14	5.6%
The Colony	9	7	15	2.8%
L’Ambiance	4	3	16	2.2%
Water Club	8	5	19	2.9%
Grand Bay	16	9	21	3.3%
Fairway Bay	17	9	23	4.6%
Inn on the Beach	19	10	23	4.5%
Seaplace	23	12	23	2.6%
Longboat Harbour	23	12	23	2.1%
Longboat Key Tower	6	3	24	3.4%
Pierre	2	1	24	1.5%
Longbeach	6	3	24	1.8%
Islands West	5	2	30	2.3%
Privateer	8	3	32	2.6%
Beachplace	22	7	38	2.1%
Islander Club	12	3	48	2.3%
Cedars West	9	2	54	1.9%
Longboat Beachcomber	7	1	84	2.3%
Longboat Terrace	5	0	?	0.0%
Sand Cay	8	0	?	0.0%
Sample Total	240	125	23	3.0%
Longboat key Total	478	219	26	2.9%

For example, Players Club has the lowest inventory in this sample, at just six months. This means that if units continue to sell at the same rate in this Longboat Key condo complex, it would take roughly six months to sell them all. On the other end of the spectrum there are condos such as Longboat Terrace or Sand Cay, which had no sales in the last twelve months. This makes it very difficult to say when the units offered there could reasonably be expected to attract a buyer. These last two condo complexes are by no means alone: sellers in many other condos on Longboat key experienced the same agonizing conditions in 2006.

The number of sales did not seem to be related to the number of units in any given complex. Promenade, with 112 units, had 9 sales in the last 12 months. But Privateer, with 116, had only 3 sales. Both had, at the time of this writing, the same number of active listings (8). As a result, Promenade has a much higher turnover rate and substantially lower inventory (measured in months).

Different rates of turnover might be an indication that the marketing needs to be approached differently for each condo complex. If you would like to know how your condo stacks up against others, or to find out more about our marketing strategies, please call Alison or Raul Elizalde for a consultation.

When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise and knowledge to help you see where you stand when negotiating your real estate transaction, whether you are buying or selling a property. Our track record, added to the unsurpassed reputation of Michael Saunders & Company as the premier real estate company in Florida’s Gulf Coast, give you the peace of mind you deserve. Alison and Raul have been named Best in Customer Satisfaction by an independent research company.

Call us today at 941-350-7904 for a consultation, and visit our website, www.SarasotaProperty.info, for monthly updates on the Sarasota real estate market.

Sarasota Real Estate Insights: Winners and Losers

When it comes to prices, Lakewood Ranch took it on the chin – but other areas were barely affected.
(By Raul Elizalde, 1/07)

Following up on my previous newsletter, this month I focus on how prices for similar properties changed in various neighborhoods of Sarasota over the course of the year. I compared selling prices for Sarasota homes and condos in the last quarter of 2005 with the last quarter of 2006.

The media reported a significant price drop in Sarasota real estate prices for the year, and last month I argued that this drop, although real, was probably overstated due to measurement problems. Coming up with an accurate price drop measure is difficult because properties that sold at the end of 2005 were not readily comparable to properties sold at the end of 2006.

For example, if one year most sales are of waterfront properties and the following year most sales are of mobile homes, the median price would register a massive decline. Yet, this does not necessarily mean that the price of any property has gone down; only that buyers, a year later, decide to purchase cheaper properties.

Because the collection of properties that sell at different times is not exactly the same, calculating the exact price change is virtually impossible.

To minimize these problems, I compared homes and condos in Sarasota that sold a year apart fitting very strict definitions, i.e. within a narrow range of square footage, number of bedrooms, age, and so on. Not all areas in Sarasota had enough property sales to make relevant comparisons, but I have found a few areas that had a meaningful number of transactions to provide a reliable estimate.

Here is what I found:

Area	Median Price Change (4Q05-4Q06)	Median $/SF change (4Q05-4Q06)
Central Sarasota (Between Fruitville and University, US41 and I75)	-3%	-6%
Central Sarasota (Between Clark & Bee Ridge, US41 and I75)	-12%	-16%
Central Sarasota (Between Bee Ridge and Fruitville, US41 and I75)	-18%	-13%
Lakewood Ranch	-20%	-21%
Gulf Gate	-16%	-13%
Siesta Key, Bayside Condos	-9%	-3%
Longboat Key (Gulfside and Bayside Condos)	9%	2%

With the exception of Longboat Key condos (more on them later) all areas showed a median price decline. The same is true for the median price per square foot, which is possibly a more accurate measure. Central Sarasota homes fell unevenly, with the area between Bee Ridge Road and Fruitville Road showing the largest decline. A possible reason for this is that this “East of the Trail” area was popular with investors during the heyday. It might be that prices a year ago were somewhat inflated because of this, or that this year investors are willing to take a price cut to unload their investments quickly. In general, the presence of investors lead to wider price swings.

Lakewood Ranch, an area that saw explosive growth in recent years, registered the largest drop in this sample of Sarasota real estate areas. Possible overbuilding might have been a reason. Every single month since 1/05, the number of properties for sale in Lakewood Ranch has been higher than the previous month, showing an 11-fold increase in listings from 56 homes to 612 in less than two years. Inevitably, this kind of supply puts a lot of pressure on prices, which is reflected in the sizable price drop I measured.

Longboat Key condos seem to have bucked the trend since the median price change shows an increase. But the factor here is that in the last quarter of 2006 many of the condos sold were on the Gulf side of the road or had access to the beach. In the prior year, however, condos of the same size and age were sold exclusively on the Bay side of the road, which are less expensive. This is a real-life example of how numbers alone can be misleading. I included Longboat Key condos in this analysis just to illustrate this point.

All this reaffirms my previous month conclusion that the 18% median price drop reported in the newspaper does not explain much. Every neighborhood in Sarasota has fared differently. I also continue to believe that this number is probably overstated when applied to the entire Sarasota real estate.

When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise and knowledge to help you see where you stand when negotiating your real estate transaction, whether you are buying or selling a property. Our track record, added to the unsurpassed reputation of Michael Saunders & Company as the premier real estate company in Florida’s Gulf Coast, give you the peace of mind you deserve. Alison and Raul have been named Best in Customer Satisfaction by an independent research company.

Call us today at 941-350-7904 for a consultation, and visit our website, www.SarasotaProperty.info, for monthly updates on the Sarasota real estate market.

Sarasota Real Estate Insights: Longboat Key and Siesta Key Condos

Demand and supply conditions for Longboat Key Condos seem better than for Siesta Key Condos, especially for Bayside units. (By Raul Elizalde, 10/06)

Building up on last week’s newsletter, this month I take a look at condos in Siesta and Longboat Key.

Readers might recall that last month I showed how different price brackets of real estate in Sarasota show very different supply/demand conditions. In the aggregate, single-family Sarasota homes priced well below $1mm sell more often and have less competition than higher-priced homes. The interesting fact, however, was that at higher prices the relationship breaks down: more homes sell in the $2-2.25mm category relative to supply than in the $1.75-2mm bracket, for example. This finding reflects the much-larger supply of Sarasota homes at the lower range, while the volume of past sales is roughly comparable.

I also warned that these findings are applicable to all Sarasota County homes as a whole, but every area is different and hs to be analyzed on its own. Siesta Key and Longboat Key condos illustrate this point well.

Gulfside condos in Siesta Key and Longboat Key have a roughly similar pattern of inventory accumulation for prices below $1mm. On the basis of the last 12-month sales volume, both Keys have around 20 months of inventory. In the lower price ranges, both have a bit of a glut in the lower range (below $600,000). In the above-$1mm category, however, Longboat Key condos seem to be in a much healthier position than Siesta Key condos. Inventory at the higher price levels reaches the phenomenal 10-year worth of supply (around $1.1mm) on Siesta Key (see graph).

The situation for Bayside condos is much more dramatic, especially at the lower-price ranges. For the least expensive condos, Siesta Key exhibits a 13-year inventory load. In almost all categories, Longboat Key seems to be at a better position than Siesta Key.

What does this mean? I do not believe that condos currently for sale in Siesta Key, or for that matter anywhere in Sarasota, will take anywhere close to 13 years to sell. What this means is that, relative to the current inventory, little has sold in the last 12 months. The issue is now centered on lackluster demand more than oversupply.

I continue to believe that supply is no longer increasing at neck-breaking pace and that demand will slowly return in the next few months. How quickly demand returns, though, depends on many factors. Stable interest rates, a rising stock market and a general improvement of economic conditions may well set the stage for a more normal market in the months ahead. Siesta Key condo owners may want to watch the supply/demand conditions closely; buyers, on the other hand, may seriously consider making a move soon as these favorable conditions exist.

When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise and knowledge to help you see where you stand when negotiating your real estate transaction, whether you are buying or selling a property. Our track record, added to the unsurpassed reputation of Michael Saunders & Company as the premier real estate company in Florida’s Gulf Coast, give you the peace of mind you deserve. Alison and Raul have been named Best in Customer Satisfaction by an independent research company.

Call us today at 941-350-7904 for a consultation, and visit our website, www.SarasotaProperty.info, for monthly updates on the Sarasota real estate market.

Sarasota Real Estate Insights: Where is the condo glut?

If you think Downtown Sarasota is the answer, think again. Downtown Sarasota condos are actually in much better shape than others.
(By Raul Elizalde, 6/06)

Much ink has been spilled about the “condo glut” in Sarasota. Indeed, the number of Sarasota condo units has increased by more than three thousand in the last three and a half years. This rapid increase has been most visible in Downtown Sarasota area, and that creates the impression that a condo glut is affecting that area more than other areas. This, however, is not true.

Although Downtown has been very active in the new condo activity, a less-visible trend of lower-priced new condo units, many of them from condo conversions, has actually created much more of a “condo glut”. In fact, much of the increase in the number of condos for sale has taken place in the lower-priced condos, away from the downtown area.

Here are the facts: from the end of May 2005 to the end of May 2006, the number of condos for sale in Sarasota County has gone up almost five times. But the number of condos priced at less than $500,000 has increased more than seven times, as opposed to the inventory of higher-priced condos priced at $500,000 or more (most of them downtown or at the beach), which went up “only” three times.

Condos for sale	May 2005	May 2006	Growth
up to $500,000	219	1595	7.3 times
above $500,000	373	1176	3.2 times
All	592	2771	4.7 times

An analysis of the Sarasota County Property Appraiser’s database also reveals some interesting facts. The total number of dwelling units classified as “condominium” increased less than 8% in the three-and-a-half years from 9/02 to 3/06, whereas the number of “single family residential” homes went up by more than 14% in the same period!

Sarasota County	Sep 2002	Mar 2006	Growth	Annual Growth
Number of Homes	102062	116511	14.2%	3.8%
Number of Condos	41788	45057	7.8%	2.2%

Excluding the City of Northport, which went through explosive growth, the number of single-family homes in Sarasota County increased by more than 9% in that period, which is still faster than the growth of condo units.

This level of construction is in line with Sarasota’s population growth, which is less than 3% per year. Condominiums, however, seem to be growing at a lower pace than population in Sarasota County.

What this data suggests is that the Sarasota condo glut is not to be found downtown but elsewhere, in the lower-priced condos away from premium locations such as waterfront, or downtown. Many of these units were apartments converted to condos and will probably revert back to rentals by sellers who grow impatient with the slow market and increased competition. The downtown area, in comparison seems to be in relatively good shape, and this should be reassuring to prospective buyers in this vibrant area of Sarasota.

When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise to help you understand values in today’s challenging market. Our track record, added to the unsurpassed reputation of Michael Saunders & Company as the premier real estate company in Florida’s Gulf Coast, give you the peace of mind you deserve, whether you are looking to buy or sell a property.

Call us today at 941-350-7904 for a consultation, and visit our website, www.SarasotaProperty.info, for monthly updates on the Sarasota real estate market.