The market for Southwest Florida property is registering record performance. The highest number of new-build starts and completions since 2006, alongside the significant percentage of cash sales and strong increases in median house prices make Southwest Florida one of the current hot spot areas in the state.
Big uptick in new-build property
A recent survey by Metrostudy found that new homes in the Sarasota-Bradenton area are crushing the numbers seen since Q3 2006. Specifically, new-home starts in the first quarter of this year rose by a massive 61.6 per cent year-on-year and by an impressive 21.5 per cent over the quarter. In total, some 1,443 new single family homes were started in the first three months of this year, the highest figure for almost a decade.
Further indications that property in Southwest Florida is making a full recovery can also be seen in statistics for new-home completions. Between January and March this year, some 1,261 new single family homes were finished in Sarasota-Bradenton, up 37.8 per cent in the year and 15.2 per cent in the quarter.
Tony Polito, the regional director of Metrostudy in Sarasota-Bradenton points to strong demand as the main factor behind the massive uptick in the number of starts and completions on single family home properties in the area. “Because of retiree demand, there will continue to be growth in starts and closings in Sarasota over the next few years,” he was quoted in the Herald Tribune newspaper.
Cash is key for Southwest Florida property
Florida property has always attracted cash buyers, particularly foreigners and property investors who tend not to require financing to purchase homes in the area. The Sunshine State tops the national rankings in terms of cash buyers with 50 per cent of all purchases made with no mortgage financing.
Within Florida, property in Sarasota-Manatee metro area has particular appeal to the cash buyer. In total, 53.4 per cent of all transactions were in cash, according to a survey by RealtyTrac. This brings Sarasota-Manatee to third place in the national metro area ranking and takes it well above the country average of 31.8 per cent.
Florida real estate agents attribute the high percentage of cash sales to the buyer profile. The strong presence of international buyers and investors within the Florida property market is the main reason behind the statistic.
Sarasota property prices on the up
The surge of interest in property in Southwest Florida has naturally affected median prices. RealtyTrac found that prices for single family homes and condo properties in Sarasota-Manatee reached US$210,000 at the end of the first quarter this year. This translates to an annual increase of 12 per cent in a market where house prices have been rising for 52 consecutive months.
Charlotte County, another popular region among Florida property buyers, saw even higher price hikes. RealtyTrac reported that single family home and condo prices went up by 24 per cent over the year to March, bringing the median price for Charlotte County property generally to US$170,100.
These price rises have led to what the Herald Tribune calls a “frenzied market”. Competition for houses priced at the median level is so fierce that the newspaper said in early May this year, “If you want to buy a mid-priced single family home in Southwest Florida, better move fast”.
Real estate agents interviewed by the newspaper all concur that mid-range properties are selling the fastest and have the highest demand. “Nice homes between US$155,000 and US$355,000 are our hottest market, selling very quickly,” said one agent quoted in the article.
Dies Poppeliers, Managing Director of BRIC Group, believes the current market situation for Southwest Florida property is excellent news for investors looking for land to build on in the area. “This buoyant market where single family homes are being sold quickly and after multiple bids shows there’s strong demand, enhancing investment potential for anyone buying land in this part of Florida and building on it,” he said.
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.
(Source: Herald Tribune)