Urgency in Sarasota Real Estate Market

As of March 31, only days away, the federal government will cease its backing of mortgage based securities. Many believe that this move will cause rates to begin to rise, perhaps rapidly. Buyers of real estate who are looking to secure a mortgage may see the window of sub 5% rates rapidly closing. A mortgage rate increase of even 1 percentage point makes a huge difference over the life of a loan. If you are considering a real estate purchase requiring financing, this may become the most critical factor to consider.

Sarasota Short Sale Pricing - Follow the Bouncing Ball

Recently, a home came on the market priced at $325K. A few months later, having not sold, the price was reduced to a $285K short sale. When a buyer made an offer of $235K, the bank never responded. 6 months went by, not a word. The buyer backed out. When the bank foreclosed on the property and listed it as an REO, they priced it at $152K.

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Another property was listed as a short sale for $199K. It never sold. The bank foreclosed, and put the property up for sale for $300K, much closer to its real value. It sold rather quickly, which indicates that the bank never had any intention of selling the property for its short sale list price. These must have been dozens of offers.

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A short sale came on the market for $219K. Given the homes true value of closer to $300K, it went pending rather quickly. Months later, when it sold, it was for a price of $280K.

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For every story of a short sale that went smoothly, there are dozens more that make no sense. Some short sales do work out, and can represent awesome deals. But a buyer needs to buckle up, and hold on for the ride.

Siesta Key Dreaming

I am watching the weather reports. Another snowstorm is set to hit the northeast, which just makes me thankful all over again that I moved south nearly 10 years ago. That was the best move I ever made.

So in the spirit of warmth, sun, and beaches, I thought it appropriate to revisit a topic of much interest - are there any affordable homes on Siesta Key? Now, more than ever, the answer is YES. And if you are even remotely considering a retirement or second home and you want to walk to one of the top beaches in the world, now is your time.

Siesta Key Homes - Starting at $249K as of 2/25/2010

Siesta Key Condos - Starting at $150K as of 2/25/2010

As a true beach bum who moved to Sarasota after standing on this very beach in awe, I can tell you...like me, you will never regret having a home here. Especially if you can get a great deal.

http://www.TrueSiestaKey.com

http://SeeSarasotaLive.com Live webcam located on North Siesta Key

Short Sales Changes Coming?

In November of 2009, the guidelines were set for non Freddie Mac/Fannie Mae short sale procedures. The guidelines are set to take place in April 2010. Fannie Mae and Freddie Mac are due to reveal their own version of the HAFA Act very soon. The acts, if implemented and workable, will solve some daunting short sale problems and hopefully begin to clear short sale inventory.

The act will address two of the biggest frustrations of short sales.

1) Blind offers - in the past, the listing agent often set the listing price without input from the bank as to what they will actually take.

New procedures will allow borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

2) Unacceptable time frames - In the past, buyers and sellers had no choice but to wait for unspecified amounts of time - average 6 months, but up to a year or more in some cases - for a decision from the bank.

The new act will allow for standard processes, documents, and timeframes/deadlines.

It is my opinion that should these new processes be implemented in an enforceable way, the inventory will begin to rapidly drop to a normal level. At the moment, short sales dominate the market, and buyers are often unwilling to enter into a contract with so many unknowns and opt instead to wait until a "traditional" sale hits the market. Once lenders begin to utilize these procedures, and short sales are easier to navigate, buyers will begin to take advantage of the sales.

The Paradox of "Foreclosure Value"

The request goes something like this "I know there are a ton of foreclosures in the area. I want to take advantage of one, but I want to make sure I am buying something that will definitely increase in value"

Don't get me wrong, I understand what they are trying to accomplish. But when a neighborhood (or community or town or county) is rife with foreclosures, the concept of "recovery " and "values" is a dicey one. The very reason you can get so many properties for so cheap is generally because there are just too many abandoned properties in that area. Value in those locations is hard to guarantee. I recently looked at what appeared to be a great deal for a client - until we saw that 11 other homes ON THE SAME STREET were in distress. Value? Probably not.

In Sarasota, we do not see nearly the REOs as they have in other parts of the state - and exceptionally few in higher end properties (over $100K). And when the true steal comes up, it is gone within minutes. This is not an exaggeration. Recently, I saw an REO the moment it hit the system. Recognizing immediately that it was a deal - priced at $275K, worth about $400K - I ran out to the property to take photos for my customers. I got there less than 1 hour from the time it appeared on the market.

I was one of 17 people on property.

By the time one of my clients expressed interest 3 hours later, the property was pending. Gone. A true deal does not last long. The media has made it sound like there are no buyers. But Sarasota is crawling with buyers.

I look at every opportunity for my buyers - and sometimes we get lucky with an REO and steal a property. But I still maintain that some of the best deals to be had are from traditional sellers. If they purchased prior to the boom, they likely have plenty of equity in their home and can afford to sell. You get a great deal, and the home has actually been maintained. Not only that - those homes arent getting nearly the attention of the REOs, which often end in bidding wars and higher prices.

Add Sarasota to Another List!

AARP Magazine over the years has ranked retirement destinations under a variety of criteria, from "The Best Places to Live a Simple Life," to the "Healthiest Hometowns" and "The Best Places to Reinvent Your Life". From these lists, CNBC.com has focused on a selection of towns and cities recognized as top places to retire, picking the best and most unique locations from AARP Magazine's overall reviews.

Top Retirement Hotspots includes as #4, Sarasota FL.

Sarasota is perhaps one of the most popular retirement destinations in the most popular US state for retirees. Located on the Gulf Coast, Sarasota has 35 miles of beaches and offers residents opportunities from golfing to boating and gourmet dining. The town also offers a range of activities, including an opera, symphony, film society and a range of art galleries.

This destination is attracts plenty of vacationers in the winter months which does make it a bit more crowded during those times. The area also finds median home values at $185,200, which is slightly above the national average. Regardless, AARP Magazine has identified Sarasota, a city with the nickname "Paradise," as #4 on its list of "best places to reinvent your life.” Add that to its recent designation as the most undervalued city in America, and Sarasota is the obvious choice for a second, vacation or retirement home.

Want a Sarasota Condo? You'll Need Cash

Although lenders and brokers will tell you differently, it is becoming increasingly obvious that if you want to purchase a condo, you will need to be a cash buyer.

In the last several months, we have watched prospective buyers place their hopes in a lending system that promised a condo financing package, only to be left with nothing at the end of the day. While there may be a few programs out there, the rules are so stringent that everyday people are not eligible.

This of course has far reaching implications not only for buyers, but sellers of condominiums. The pool of prospective buyers shrinks considerably when the financing disappears, and sellers are beginning to consider seller financing as an alternative.

Buyers with cash are holding the power card in the Sarasota condominium real estate market.

Sarasota's Rebel Real Estate Market

I've always been a big of a rebel. I love seeing people or events that buck the trend. That why the latest numbers out of the Sarasota Real Estate Association had me smiling - while much of the world continues to insist on gloom and doom predictions and dire outlooks, no one appears to have told the buyers in Sarasota. Or we are just a bunch of sunshine-loving rebels!

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From SAR -

With 648 total property sales reported in December 2009, the Sarasota real estate market saw the most closed transactions since March 2007, a 33 month span. Overall sales in December 2009 were also 52 percent higher than December 2008, when only 406 properties changed hands, and 70 sales higher than the 578 sales reported in November 2009. Median sale prices were also up last month for both single family homes and condos.

For the full year 2009, the trend lines have been dramatic. Monthly home sales have climbed to the high 500s and low-to-mid 600s, compared to 2008 when sales often dipped to the low 400s and even into the 300s. The overall number of closed sales in 2009 stood at 6,699, compared to only 5,459 in all of 2008, for a 22.7 percent increase. In addition, the overall property inventory has plunged from the 10,000 to 13,000 range in 2008, down to the low 6,000 level at the end of 2009.

For local Realtors®, the monthly and annual trend stands in contrast to the national picture. Sales nationally have slowed during the early winter months, but not in Sarasota.

“This is very good news, especially considering the fact that our market is showing considerable strength against a national backdrop of uncertainty,” said 2010 SAR President Erick Shumway. “Sales are continuing to rise, and we’re starting to see a return of appreciation as the available property market tightens and buyers look more toward arm’s length sales instead of short sales and foreclosed properties.”

The first-time homebuyer tax credit was extended and expanded to include many other homebuyers on Nov. 6, so the home buying sales rush could easily continue through the season and the first quarter of 2010. Recent statistics continue to point to a local market in a prolonged recovery period.

Short sales and bank-owned property sales continue to impact median sale prices locally. Normal arm’s length sales bring more than double the price on average than those for distressed properties. For the full year 2009, distressed property sales accounted for 40.7 percent of all sales, compared to 2008’s total of only 21.2 percent. Thus, while the median sale prices did drop in 2009, this was due in very large part to the distressed segment of the sales.

The inventory level in December 2009 was at the lowest level since late summer of 2005 and the years prior to the boom period from 2003 - 2005.

“One of the biggest statistical positives in December was the month’s supply of homes, which fell to 8.1 months for single family homes and 12.3 months for condos,” noted Erick Shumway. “These are the lowest figures in two years. Once they reach 6 months, the market is considered to be in equilibrium between buyers and sellers. Last year at this time, the figures were 19.1 months for single family and 31.8 months for condos. This is a huge difference in only a short period of time.”