Category Archives: Stats for Sarasota County

Pending Report for November 4, 2017

This was a big week everywhere but none looking as big as downtown Sarasota. The figures for this year are distorted from 9 listings in the VUE closing this week and being entered in MLS for the first time.  In most large new construction projects, only a few sample listings are maintained in MLS. This keeps MLS manageable and from being overrun, so to speak, by a single building. If all of the VUE listings were entered from the project start, Zillow would be a mess with every other listing being in the VUE.

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When listings that were not previously entered in MLS eventually close, the listings are often entered in MLS at closing for agent/broker credit (as was the case with these listings). The listings still have to go through the same MLS progression. The contract date, listing date and sale date are entered the day of closing giving each the same date.  Undoubtedly all 9 of the new construction listings went to contract much earlier, perhaps even in previous years. Again, there is nothing wrong with this, you just have to be aware of it as you study the results. Demand Downtown was not up 1300% last week. (Another unavoidable side result of this is that the days on market stat will be ZERO for all such listings – be leery of any broker or agent including new construction sales in their quoted days on market performance).

Get ready for many weeks like this as loads new construction starts to close.

Another interesting thing to watch with regard to new construction closings, is how much of it ends up back on the market. I will try to highlight that for you.

Tax Appreciation Rates on Downtown Sarasota Condominiums

I have looked at appreciation by building a couple of times since starting my blog. In the past, I have calculated the average sales price in each building over the course of a couple of years and compared one year to the previous to get the appreciation level. The trouble with this approach is the limited number of sales in each building. There are not enough sales during a single year in most buildings to add a shred of validity to numbers.

So, this year, I am taking a shortcut that should make things a lot more interesting and, I believe, more accurate. I will use the Just Value figures from the Property Appraiser. The Just Value is supposed to be the market value of the property before any exemptions or Save Our Homes reductions. There aren’t many details about the process the Property Appraiser uses to calculate Just Value (read about it here), but the results can be no less accurate than auto-valuation models used by Zillow or other websites.

The biggest negative about using the Property Appraiser’s figures is timing. We pay our property taxes in arrears. The last tax bill we paid, sometime between November 2016 and March 2017, was for the calendar year 2016. The valuation date for that year’s tax bill was as of January 1, 2016. The comparison I am making here is between this 2016 valuation and the 2015 valuation. The appreciation I refer to is what occurred during calendar year 2015. This timing issue is also the biggest reason people think the tax valuations are always wrong. If you expect them to represent the current value of your home, they are always wrong. The tax values are always somewhere between 10 and 22 months stale.

Finally, in the interest of word economy,  I will refer to the change in the Just Value as appreciation. It may not reflect the real change in market value of the properties being discussed and would probably best be described as what it really is – the change in Just Value as published by the property appraiser.

Appreciation by Building and Area of Downtown

The chart below shows the buildings that account for most of the sales downtown. I have grouped the buildings by area of town. The one thing you can say about the numbers is that the property appraiser did not paint everyone with the same brush- The rates of appreciation varied considerably.

The hottest place to be in 2015 was almost anywhere on Golden Gate Pointe.  While the area tied the group (of 2) that was adjacent to Ritz Carlton Drive, Golden Gate was home to the seven buildings with the most appreciation. Every building with an appreciation rate above 15% was on Golden Gate Pointe. All but 5 buildings on Golden Gate experienced double digit appreciation.

Interestingly, the central downtown and North Trail buildings brought up the rear, with each area showing a 3% appreciation rate. Except for the Renaissance, the 8 buildings in these 2 groups are made up exclusively of buildings from the previous wave of new construction.

Waterfront/view was apparently not the sole driving force in the appreciation. In terms of quality views and the percentage of residences in each building with high-quality water view, I don’t know that many places can beat Condo on the Bay. The buildings are so close to the bay that on a sunny day the inside of every residence looks blue because of the water reflecting in through the sliders. Yet the appreciation rates were a fraction of most other Bayfront buildings like ones on Gulfstream or Golden Gate.

Apprecaition Based on Beginning of the Year Just Value

This one is interesting and explains a lot about the schedule above. Here, I went residence by residence, regardless of building, and sorted each residence into 4 groups based on the 2015 tax values (as of 1/1/2015). The schedule below shows you appreciation ranges grouped by the beginning of year Just Value. Properties that started 2015 with over a $1M Just Value appreciated 50% more, on average, than properties valued at under $1M.

I have done several posts on this subject, and the results are always the same. The higher the value (on average), the better the property appreciates, the lighter the hit it takes in a downturn (the only 1 I have ever witnessed anyway), and the faster it bounces back after a setback. So, if you are considering the purchase of a luxury property, you can write this chart in the “reason to buy” column. The million-dollar condo you considered but missed out on last year will have a neighbor on the market asking about $100k more this year.

People that put off upgrading also didn’t do themselves any favors. Consider people thinking about an upgrade from their existing home. Maybe they are just seasonal visitors, but are considering the sale of their homestead and getting something larger, nicer, or with a better view to live here full time. The chart below shows how prices moved against this group during 2015.

Let’s take two people, both wanting to move up from existing properties but at different price points. One person owns a condominium downtown valued at $750k and is looking to sell that and buy a different condominium in the $1.5M range for a permanent home. The second person is doing the same thing but at higher price points – going from a $1.5M property to a $2.5M property.

At the beginning of 2015, the parties above must come up with $750 and $1M, respectively, in addition to the sales proceeds from their existing homes (closing costs excluded). By the end of 2015, they would need $850k and $1,125k, respectively, to buy the same properties they were considering at the beginning of the year. The spread increased by $100k and $125k under these two scenarios, due to difference in appreciation rates between the properties.  This is a 13% increase in the amount of money each would need to raise to buy the same condo a year apart.

Again, the figures here are nearly 2-year-old tax valuations. If you have questions about the current market value of your property, call a real estate professional.

2014 Downtown Condo Update

The table below shows the key market statistics for the Downtown Sarasota Condominium market as of December 31, 2014. All data is from MFR MLS and Trendgraphix unless otherwise indicated.

 

December 31, 2014 December 31, 2013
Unsold Inventory at December 31st 184 212
Average Unsold Inventory –  Past 12 Months 201 201
Unit Sales – Past 12 Months 359 378
New Listings – Past 12 Months 462 514
Expired/Withdrawn Listings – Past 12 Months 148 163
Months of Supply 6.1 6.7
12 Month S&P/Case-Shiller Home Price Index (National) % change 4.6% 10.9%

 

Unsold inventory as of the end of December was 13% less than the previous year. It is also represents the lowest level of inventory at the start of our winter selling season in the past 10 years. When you slice up the 184 residences listed for sale the way the typical buyer does (price point, view, age of building, location within downtown, room count, etc.), the selection for each individual buyer becomes very limited.

Sales were down 5% compared to 2013. The 10% reduction in new listings undoubtedly played a role in the reduced sales level.

Expired and withdrawn listings were down 10% so properties are becoming easier to sell. Still, 148 expired/withdrawn listings with 359 sales still seems like a very high failure rate. However, an improvement in this statistic in the face of a dramatic slowing appreciation rate (from 10.9% last year to 4.6% this year) is surprising. Usually, a slowdown in appreciation means more expired and withdrawn listings as sellers are the last to realize (or believe) the slowdown.