Monthly local real estate reports often pointed to a similar takeaway in 2023: while prices probably wouldn’t revert to where they were pre-pandemic, the days of site-unseen panic buys are over, with homes spending more days on the market and a healthier level of inventory to choose from for homebuyers. In fact, November’s inventory supply reached a new high for 2023, surpassing any other month so far this year.
For single-family homes in Sarasota, supply increased year-over-year by 79.2 percent, to a 4.3-month supply. It increased by 13.3 percent, to a 3.4-month supply, in Manatee County. Sarasota condo supply increased by a whopping 133.3 percent, to a 4.9-month supply, while Manatee condos increased by 63 percent to a 4.4-month supply. A balanced market is five to six months’ supply, according to Brian Tresidder, 2023 Real Association of Sarasota-Manatee (RASM) president and vice president of operations at William Raveis Real Estate.
In the commercial sphere, major sales were made and lots of new development is delivering more condos, apartments and commercial spaces. An affordability incentive OKed by the City of Sarasota increased density in exchange for affordable units downtown, and the statewide Live Local Act, which aims to incentivize developers in similar ways, took effect, even though it hasn’t yet been applied in Sarasota.
Another thing to note about 2023? The North-Port-Sarasota-Bradenton metropolitan statistical area (MSA) lucked out with a mild hurricane season and ducked a red tide event over the summer, which saw a better September than most years.
Right now, the inventory of active listings is at its highest for the year, approaching the level of inventory the area had leading up to the pandemic.
As for the price of single-family homes, median sale prices decreased by 4.1 percent, to $485,861 in Manatee County, and increased by less than 1 percent, to $500,000, in Sarasota County. In Manatee, median sales prices for condos decreased year-over-year by 1.8 percent, to $351,500. And in Sarasota, median condo sales prices increased by 58.8 percent from last year to $547,704—ikely due to more sales at a higher price point. Thirty-four percent of Sarasota condo sales sold at or above $1 million in 2023.
Let’s hear from agents on the ground, who shared their insights about the year and their predictions of what’s to come.
What were some of the biggest takeaways that marked 2023?
“This was the first post-pandemic year we’ve seen the market start to move back to what we’d call more normal,” says Tresidder.
The effects of panic buying are showing. Tresidder cited a national survey that indicated some buyer’s remorse. “In a market that’s not in a frenzy, buyers take more days and maybe look at 10 homes. In the last few years, if you wanted [to buy], you didn’t have that time. People say they picked the best option at the time but would have liked to have more options. It’s tying into that rising inventory now.”
Another item tied to increased inventory is increased interest rates. Homeowners who bought when the interest rate was 3 percent are slower to put their home on the market and trade that in for a nearly 8 percent rate.
Bernadette Caswell, of Michael Saunders & Company, says, “We’re seeing a wider gap between the asking price and the sale price, and we’re seeing longer times on the market, but nothing unreasonable. I remember times when a property would be on the market for six to nine months. Now it’s more like 60 days. It’s ideal for both buyers and sellers. They’re not rushed and stressed, and they’re making better decisions. Inspectors, lenders and appraisers are all working at a more reasonable pace. Drive-by appraisals and waiving inspections aren’t happening any longer.”
What did buyers crave in 2023?
“Although it’s still a seller’s market overall, a home has to have curb appeal and the details need to look good,” Caswell says. “It’s critical to stage and make your home as attractive as possible. Buyers are looking for turnkey. It’s not about the money as much as the process. People don’t want to put the time and energy into a fixer-upper.”
She also highlights the importance of well-working HVAC, plumbing and electrical, and adds that “a pre-inspection by the homeowner is a good idea. If the inspector pinpoints the things that need to be repaired, it’s better to repair them than take your house off the market because it didn’t pass an inspection. Homes with a new roof have a big advantage, too.”
A callback to realistic pricing is also top of mind. “Lots of sellers are over-asking and still aiming for the numbers they saw right after the pandemic,” Caswell says. “But that was a blip and it’s over. Sellers need to get more realistic. The public will tell you what your home is worth. If you have 30 showings, and it doesn’t sell, then you have your answer.”
Should I remodel to sell?
“Approach remodeling with an all-or-nothing take,” says Tresidder. “Buyers don’t view a home as remodeled unless the whole thing is done. So if the main bedroom was remodeled but the kitchen wasn’t, the buyer will see it as having to remodel the other parts. You probably won’t get back the money you put into upgrading just one part.”
Affordability is in the eye of the beholder
Someone who wasn’t a homeowner before the explosion of pricing due to the Covid-19 was left on the outside looking in, Tresidder says. Even though prices were high, a lot of people’s home values went up and interest rates were down.
“If you didn’t ride that wave of equity and purchase at that low rate, you can only afford half the house now,” Tresidder says. “It’s been a major problem with working people getting priced out. Throw in inflation, and it’s been tough on buyers who don’t have discretionary funds and are working here.”
But for others, the market is still seen as affordable. “When you talk to agents in Naples and their clients are looking for something more affordable, they suggest Sarasota,” Tresidder says. “Those agents wonder why our houses cost less. For people coming from California, for example, waterfront homes are four times as expensive. In Naples, we have listings that cost $70 million to more than $100 million. Sarasota’s priciest homes are in the $30 million range.”
“Other area comparisons for out-of-state buyers include Miami and Fort Lauderdale, where a canal-front home is two to three times more expensive,” adds Kevin Robbins, senior partner and agent with Harry E. Robbins, which specializes in commercial real estate.
Increased insurance rates may also be contributing to more homes on the market
“For a lot of people, insurance rates have jumped two to three times more overnight. For someone who is living paycheck to paycheck, a few thousand more dollars to spend on homeowners insurance a year is a big deal, and it counts against whether buyers can qualify for a mortgage,” Tresidder says.
How have higher interest rates affected the market?
The average interest rate for a 30-year-fixed mortgage in Florida right now is 7.515 percent, compared to rates that fell to a record-low 2.65 percent in January 2021.
“The uncertainty as interest rates crept up dampened consumer confidence, even among cash buyers,” Caswell says. “But rates are coming back down a bit. The 3 percent rates we saw were a fluke. I don’t think we’ll see that again. And indicators show confidence is building back up again.”
As for the commercial sphere, “we’re still seeing leasing activity doing well,” Robbins says. “Some people are holding off on buying and leasing due to interest rates and keeping an eye out for purchasing opportunities. But interest rates were higher in 2000—around 9 percent. People think they’re high right now, but historically they’re not.”
Where are buyers coming from?
“Historically, it was mostly the Midwest. Now we’re seeing a lot of interest from the East Coast, like New Jersey, Connecticut and New York,” Tresidder says. Part of that is likely due to prices. “Your typical working family in Ohio just can’t afford it here any longer.” As for international buying, “it isn’t at the level it was.”
Robbins is also seeing a large northeast interest. “Ten years ago, it was difficult to get the attention [of buyers in the northeast], and now they’re calling us and they’re no longer saying we’re too small of a market,” he says.
How is the commercial market performing?
“The industrial market is strong and the office market is still doing well, especially in medical and primary retail located on hotspots like Main Street,” Robbins says. “Properties weren’t as brisk to sell as in 2022, but we didn’t see any price reductions—and pricing has generally stabilized as compared to the increases we saw in 2021 and 2022, which shot up by 50 percent.”
Plus, more opportunities to build increased density are raising prices for buildable land and interest in Sarasota, like this one headed to downtown Sarasota.
“A lot of business owners want to know where their employees will live. Knowing more apartments are being built is a selling feature to market the area,” Robbins says. “We know we’ll always have high-end condos, but the goal is to balance that with more market-rate or attainable housing, or even options for buying a smaller condo.”
What will 2024 look like?
“I see a slow but steady market for the next few years. I don’t see prices jumping or going off a cliff,” Tresidder says. “We’re entering an election year, which often has people hit the pause button. The interest and insurance rates are causing issues but we still have a large number of people who want to move here.”
Robbins agrees. “We’re in one of the most sought-after areas in the state and country,” he says. “From a commercial perspective, there’s a lot of demand for housing, and goods and services follow that. I expect to see a strong market in 2024, but not at a rapid pace like years before. I think 2023 was a pivot point to return to pre-pandemic timing as far as marketing techniques from the sales and leads perspective. Prices won’t adjust much at this point.”