Persistence Generates Capacity to Grow

Guest Correspondence

Sarasota's Real Estate Market enjoyed a second consecutive record-breaking year for sales transactions. Persistent strength throughout the year in all statistical categories gives rise to confidence that our region not only possesses soundness and stability, but also sufficient capacity to continue its steady growth.

Persistent gains in sales, home prices and demand, along with current consumer confidence in real estate as a prudent long-term investment, are just some of the reasons why I feel so bullish about our market. Add to that homebuilder confidence in the need for new inventory—it was reported that Sarasota/Manatee recorded a three-year high in new construction permits issued—leads virtually all industry experts who have weighed in to declare our region as one with great opportunity to maintain its positive path.

A recent survey of all mid-sized markets across the U.S. showed that our metropolitan area (North Port, Sarasota, Manatee) had the highest concentration of Baby Boomers.  This group remains the most prolific within my business activity, and I hear the same from my high-producing peers. Baby Boomers in many cases have built considerable equity in their current primary residences and as a result are also likely to buy a property with cash, eliminating any potential issues related to credit. In fact, data showed that half of all purchases in Sarasota last month were all-cash transactions. It is estimated that approximately 10,000 Baby Boomers turn 65 years old each day, and will for the next 14 years. Regularly, Florida is ranked the highest of all states as our country's most desirable place to live. As a result, it is hard not to be enthusiastic about The Sarasota Real Estate Market's capacity to grow.

Michael Saunders & Company recently released an article noting that in the Sarasota, Manatee, Charlotte region, sales of all properties exceeded last year's activity by 7 percent with an increase in median values of 15 percent.  Michael Saunders said that the growth in values were, "more than four times the region's normal rate of annual appreciation."  According to TrendGraphix, price escalation since December 2010 has grown more than 40 percent.  It is these persistent gains in pricing and significantly shortened list-to-sale time that are encouraging buyers to make their move into the market. While we are still in a seller's market with tight inventories at all price segments, it is my hope that our sales pace does not slow as a result of inventory limitations. Rather, with market conditions expected to continue to be strong through our forecasted record-breaking tourist season, we anticipate more sellers will be stimulated to get into the game to take advantage of the strong demand.

Michael Moulton is a certified residential specialist broker-associate with Michael Saunders & Company.

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