Luxury Tier Continues Growth Pattern

On Real Estate

BY MICHAEL MOULTON SRQ DAILY SATURDAY PERSPECTIVES EDITION SATURDAY JUN 23, 2018

The whole of the Sarasota Real Estate Market continues to experience measured growth in sales, price appreciation and generally stable inventory conditions. But it is in the luxury tier—properties for sale over $1 million—where activity has been consistently showing year-over-year growth of some significance.

What has been especially noteworthy in the Sarasota Real Estate Market this year is the completion of several spectacular new condominium projects, which have begun welcoming residents over the last six months. These developments, as well as other existing luxury condo residences had an increase in sales of more than 95 percent in the first four months of the year, when compared to the same period in 2017. By comparison, single-family homes in the over-$1-million category increased 24 percent over prior year. 

Another remarkable piece of data is in pending sales, those properties put under contract in the month but not yet closed. According to Trendgraphix, million-dollar-and-above condominiums have shown consistently high growth over prior year with an average of 77 percent more pending contracts signed each month in 2018 compared to last year. Keeping an eye on pending contracts is key to being able to project sales activity in the one to three months ahead.

Also of note is inventory of available luxury condos in the Sarasota Real Estate Market. Using the first four months of the year, the area is averaging 27 percent less inventory of million-dollar condo properties on the market. In contrast, inventory of luxury single-family homes is averaging 27 percent more monthly inventory when compared to last year.

The luxury condo market could be said to have been “disrupted” by the addition of the new buildings, but with others currently under construction and several more in various stages of design and development, I believe the trends we have seen thus far in 2018 are likely to become the norm over the next couple of years. There has been great pent-up demand from both in-market and out-of-market buyers wanting to buy new construction, and with years of no new product coming to market, I believe there is great promise for luxury condo absorption. 

I am finding a desire from current residents on the keys to want to relocate to downtown Sarasota and some new east County developments. In addition, there are many “baby-boomer” local clients looking for the lower-maintenance, privacy and security, and especially luxury-hotel-like services and amenities of today’s condominiums, instead of maintaining a large single-family home.

When looking at where the majority of our non-residents are coming from—the northeastern U.S., as well as Canada and the U.K.—Sarasota Real Estate is a great value/investment in comparison to their home communities, with an incredible bonus of the extraordinary Sarasota lifestyle. Luxury buyers are no longer just seeking prime locations; lifestyle has become a primary factor in where to make their investments. The ultra-wealthy have also become increasingly mobile with easy global travel and tech advances allowing them to work remotely, allowing them to spend more time in their preferred location.

The Federal Reserve released a recent report identifying there are 12.6 million U.S. households that rank in the nation’s top 10 percent level of wealth, defined as having more than $1.2 million in total assets. Market analysts used this information to assert that there are more potential wealthy buyers than ever before.

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

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