As someone interested in investment property, you must take the required steps to ensure that you aren't throwing money away. Given the current landscape of the real estate market, that point matters even more.
What is the state of one market compared to another? How does low inventory affect availability from one place to the next? Is the city suitable for profitability from a rental property?
Below, you get a high-level overview of Sarasota to help you decide if you should try to grab one of the properties for sale.
What Factors Affect the Sarasota Housing Market?
As is the case around the USA, the rate at which you see home sales, listings, and more in Sarasota is based on several factors that you need to bear in mind. These are as follows:
- The state of the economy. Remember that sellers get multiple offers from both investors and those who simply want a place to live. However, affordability depends on elements such as GDP, prices of goods, employment ratio, GDP, and more.
- Mortgage interest rates are another important concern as they speak to how expensive it is to even get the assistance of borrowers. With the Fed's decision to use higher rates to fight inflation, the rates are at record highs. This means that many buyers are simply priced out of the market and cannot afford homes.
- Subsidies, deductions, tax credits, and more fall under this category. Essentially, the government is in a position where it can make and enforce policies that will dictate how feasible and attractive it is to purchase a home in Sarasota.
- Demographics present a very interesting and essential consideration. Put simply, this speaks to groupings of people in the population based on certain similar attributes. Examples could be race, age, income bracket, and more. You can usually look at demographic behaviors to get a feel for trends in the real estate market.
Median Home Sold Price Vs Median Listing Home Price
Year over year, the housing market in Sarasota has been trending up. February 2023 saw the median listing home price reach $573,900. Making informed decisions in this landscape requires understanding what the market patterns look like.
February 2023 was also a time when you could call the city a balanced market. Put simply, this means that the demand and supply were roughly the same, which has not been the case in most of the United States.
In contrast to the median listing home price, the median home sold price was $490,000. This means that if a supplier were to sell a home in Sarasota, it was likely sold below market price. Using the median figures, this would represent a difference of about 14.5%.
Considering that the sale-to-list price ratio in the city was 97.16%, homes went 2.84% below the asking price on average.
This is one of the few places where buyers aren't seen having to bid upwards just to be able to secure a home.
Finally, the median days on the market in Sarasota, as of February 2023, was 67 days. Since last year, this went up just slightly, meaning that those selling homes in the city are taking a little bit longer to do so than they did previously.
What Are the Current Market Trends in Sarasota?
There are technically a lot of trends out there, but not all of them are relevant to someone interested in the long-term investment property side of things. With that said, here are the ones you want to know:
- Compared to January last year, home prices in Sarasota went up 11.1%.
- January also saw an average of 27 days on the market compared to 11 days in the previous year.
- The number of homes sold in January 2022 was 216, with that number being 146 for 2023.
- There was an 11.1% increase in the median sale price for homes in the city.
- The average home sells for about 4% below the list price, entering the pending state within about 25 days.
- When homes are hot, they go pending in about 7 days and sell for around the list price.
- Based on Redfin calculations, the sale-to-list price for different home types in Sarasota stands at 96.4%.
- Only about 1% of homebuyers from outside metros migrated to Sarasota in the past year. Chicago represents the largest number, with New York and Washington coming next.
- The Sarasota metropolitan area accounts for 64% of homebuyers in the city.
Predictions for the Sarasota Real Estate Market
Experts have created a forecast for Sarasota based on the information available. Just remember that this is not a statement of fact since the reality can be different.
Home Values in Sarasota
For the past year, the housing market has been appreciating. Zillow's report states that the very house's value is 16.4% over what it was last year, which speaks to how desirable the city is.
The forecast is a positive one. There is expected to be a continued trend of strong demand, alongside low inventory, and a median sale-to-list ratio that's on the higher side of the fence.
Appreciation of Prices
The CoreLogic's Home Price IOndex states that the home price growth figure for November 2022 was 19.6%, which exceeds the national average by more than 100%. The prediction is that the growth is going to be negative year over year in 2023.
Mortgage rates have declined a bit, which is good for the market but homebuyers have to now battle with a possible inventory shortage that comes with slowly improving affordability.
Compared to the national standard, Sarasota, has been performing very well with matching demand and supply. If there were ever a time to invest, this is it.
Frequently Asked Questions
What Makes Housing Prices Fall?
Housing prices fall when there is a higher supply than demand. This can happen for different reasons such as a disinterest coming from buyers.
How Do Housing Markets Crash?
Housing markets crash when there are too many properties and too few buyers. This causes a market bubble to form, which leads to a crash until the equation is reversed and the bubble pops.
Should It Be Easy to Find an Investment Property in Sarasota?
For the most part, supply and demand have been well-matched over the last few years. However, inventory is now on the decline. It all depends on how quickly you act.