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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Mortgage implosion or an environment of change?

Over the past month there has been more change in the mortgage industry than in the previous 20 years combined!  What happened to all those lenders?  How did it happen so quickly?  Is this an implosion or just an environment of change?

The answer to most of these questions lays in the “Secondary Market” of mortgage lenders.  Each lender needs to replenish their coffers with cash to continue to lend money to homebuyers.  To achieve this, lenders package loans into large dollar amounts and “sell” them to an investor.  This is considered the “secondary market”.  Those investors then create funds that are then made available to all of us in our personal investment portfolios, thus completing the cycle of funds.  Last month several of the funds failed and now investors have no interest in buying any additional mortgages from lenders. Thus, lenders have no new funds to lend. Without lending, they have no income and suddenly these companies have no value!  Mortgage implosion!
Over the past decade hundreds of brokers and small correspondent lending groups have formed and tried to act like the major lenders. We know these as Brokers, Mortgage Lenders and even some very large names are really “Correspondent Lenders”, in other words they buy money from the wholesale divisions of major mortgage lenders, like Wells Fargo and sell them under their own name.  Click here to read more about Sarasota Property, Sarasota Real Estate articles

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, 6/07)  

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 has 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

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