May 27, 2012 - Sarasota, FL - There are a lot of industry reports saying that now is the time to buy. Most times I have looked on some of those suggestions with a degree of pessimism. I understand why these reports generally have a positive spin on given set of market conditions. A lot of and market is affected by consumer attitudes. As far as real estate goes in South Florida, the 50% price reductions we have experienced will get anyone’s attention. Interest rates below 4% also make buying a home much more affordable. Even though the economy soured some years back, the beaches are just as beautiful as ever. Just as tides rise and lower, bad economic times are replaced with recovering economies. No one can ever guess the top or bottom but right now there are definitely buying signals you simply cannot ignore. If Sarasota and the surrounding markets are on your radar, don’t expect any future leaps to the downside.
The most recent real estate market observations in Sarasota show that in all significant categories, Sarasota has finally broke out to the upside in total units sold, average price and average price per square foot. We also have other economic factors in place such as a presidential election which will typically hold down interest rates. There is a growing gap between the monthly costs to own vs. renting. You also see a modest increase in foreclosure filings and if you don’t think the banks watch market pricing as reported here, you would be what I would like to call “wrong.” Our "to big to fail" friends are in this for the money too and I think this is a factor explaining to modest increase in first time foreclosure filings.
Where Exactly is the Bottom in the Market?
My best guess based on the latest information indicates the bottom of this market has most likely occurred during the past few months. A price bottom and interest rate bottom would never occur at the same time and the rates just last week were reported to be the lowest in history. Prices may retreat over the summer slightly but they most likely will not bottom near last year’s average bottom of $121/sq.ft. Each subdivision or market will have different parameters and values. A buyer’s agent can help guide you through pricing strategies when purchasing a home. These numbers represent the broad market.
Don't Gauge a Good Deal by How Much You Beat up the Seller
A quality competitive market analysis of the area where you are looking is key to knowing what to offer. An experienced real estate professional can help provide invaluable market insight and should help to get the best deal in today’s market. Take a look at the recent sales of the most expensive properties in Sarasota. These sales all closed fairly quick. I would take a bit of advice from these high end buyers as to what the Sarasota market is doing.
A good deal is not paying 85% of list especially when an educated seller prices their home correctly from the start. Remember, home prices are affected not only by recent sales but by the available inventory. We have seen segments of the market where homes are receiving multiple offers and can go for more than asking. Properly priced homes are selling in 30-60 days and within 93-97% of asking or better. Unless there are an unusual set of circumstances, the days of having a positive result from offering 80% of list price are pretty much over.
Low Interest Rates Help Boost Prices
I believe there is a window of opportunity to own a home in Florida for what will probably be historic lows. While prices may be inching up right now interest rates most likely will stay in low until the election. Remember the difference between 4% and 5% mortgage rate is not "just a percent" but represent a 12.5% higher payment on a 30 year loan. Combine this with the summer months being a bit slower and you have all the signals to buy between now and November.
Where to Start the Home Buying Process
The professional agents at SarasotaOne are here to help find, negotiate and close your home purchase with the least amount of stress on the best price and terms possible. Our MLS search site provides all the listings from every broker including foreclosures and distress sales for all price ranges. We email you the newest listings and price changes daily.
Happy House Hunting :)
Sarasota Real Estate Group