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Sarasota Condo Market
Miami is often held out as the most condominium-crazed town not only in Florida but also in the entire United States. But examining this number in proportion to size, Sarasota is even crazier. Condo market developers have plans for 25,000 units in Miami's central business district, or one for every 24 of its 600,000 residents. The Sarasota condo market, on the other hand which caters to only a population of 55,000, gets one planned condo for every 19. Not surprisingly, the big question on the minds of market players and observers is whether the stifling construction craze in the Sarasota condo market will counterweigh demand in order to drive the escalating prices back to ground. The fact that real estate agents have been having trouble selling Sarasota condos priced at $1 million or more for some time is a good indication that the high-end market is overbuilt.
Condos priced from $400,000 to $800,000 have been flying off the shelf, but real estate agents warn that Sarasota condo market might slow down by 2007 when constructions of nearly 1,000 new units are completed. No one can tell precisely how many of these condo units have been bought by investors, but if the level of speculation is high, and a large percentage of those units find their way back onto the market, the natural law of supply and demand could depress prices.
Still, the general consensus among buyers, real estate agents and analysts is that the Sarasota condo market is in far better shape than those in other places across the country. Two-bedroom units at The Plaza at Five Points, for example, started selling for around $650,000. They're now being resold for as much as $760,000, a 17% appreciation, even if the certificates of occupancy are yet to be issued.
Most real estate agents agree that the upper end of the Sarasota condo market remains relatively cold. The number of $1 million-plus condos far exceeds demand, and every development is struggling to sell penthouse units. Nonetheless, real estate agents are optimistic about Sarasota condo market conditions. Michael Saunders & Co. recently report that 314 units priced at more than $1 million were listed on the Sarasota condo market between the end of July 2004 and the end of July 2005. A total of 157, or 50% of these, have been sold. This is interestingly more positive than the situation within the corresponding period a year earlier, when there were 353 condos listed in the same price range, and only 108, or 30.5% of these, were sold.
Given the faster rate of sales in 2005, the Saunders report concludes that it would take 5.5 months to work off the inventory of condo units priced between $1 million and $2 million, compared to 11.8 months at last year's supply and pace. Similarly, it would take 14 months to sell all the units priced between $2 million and $3 million, compared to 25.9 months the year prior.
According to Linda Page, a real estate agent with Prudential Palms Realty, "Inventory is moving faster at the high end." Linda also invests in downtown property. She further quipped,"Beau Ciel had 14 sales of more than $1 million in 12 months. That's fabulous." Condos represent a tremendous value relative to other sectors of the real estate market. Condos priced $1 million and up are more enticing because of the bizarre boom at the lower end of the Sarasota condo market.
Earl Juanico
SRQMLS - Sarasota Real Estate
Earl Juanico
SRQMLS - Sarasota Real Estate
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