We are wrapping up another year that will definitely make it into the history books. Real Estate trends in Sarasota watched homes appreciate in value at record numbers. Most of the homes sold had bidding wars. Not to mention, less than a month’s supply of inventory was available on the market. The Sarasota Real Estate market in 2021 was crazy and like none other.
Today, I wanted to provide Sarasota’s Housing Market predictions for 2022 and what to expect in the next 12 months.
WILL HOME PRICES FALL IN 2022?
First, it is predicted that Sarasota and the Lakewood Ranch communities will continue to see large population growth. Currently, Lakewood Ranch is the number one selling multi-generational community in the U.S. Certainly, it is apparent when you drive around the area. Builders are working diligently to try to keep up with the demand. Check out my Sarasota New Construction video for more info on that.
Every day, more and more people are moving from large metropolitan areas such as Miami, Chicago, New York, and several California cities. Homebuyers are looking for a laidback lifestyle and they are finding it along the Florida Gulf Coast. Furthermore, the already strong demand for homes is expected to be additionally impacted by international buyers. Travel bans are being lifted. Consequently, international buyers will be more likely to visit and invest in Real Estate in our highly desired destination.
INSTITUTIONAL BUYERS
Aside from homeowners from major metropolitan areas and international buyers, one key element that is spurring this hot market is the institutional buyers that are investing in single-family real estate. Large investment companies are taking note of the high demand and noticing more and more families moving to Florida. These investment companies are following trends because they know that investing in homes desired by families is the smart way to invest.
While many of my clients are still homeowners that have every intention to find their dream home or retirement home. However, keep in mind that investors are taking advantage of the high demand for rental and low-interest rates. They are using this opportunity to build large portfolios of wealth in residential real estate.
If you are considering the purchase of an investment property, please let me know. There are a number of factors to consider with investment properties from rental restrictions to HOA fees, insurances, and more.
MORTGAGE INTEREST RATES
Mortgage rates, although still incredibly low, are predicted to rise in 2022. Will this slow the demand down? In my opinion, I don’t believe this will be enough to stop the buyers from shopping for homes as they are not predicted to rise above 4% at this time.
The low-interest rates may help many buyers with equity in their homes to upgrade. These buyers have seen growth over the past 24 months. They may decide that it is now time for a little bit larger home while interest rates are still low. This could help previous first-time homebuyers upgrade into larger homes. And consequently, could result in much-needed inventory at lower price points.
LACK OF INVENTORY
I read a lot that sales are slowing and that prices are leveling off. This may be happening in some parts of Florida but it is very important to know local trends. In the past 12 months, our inventory levels in Sarasota/ Manatee have actually decreased by over 50%. Typically, January is the month with the largest amount of homes listed so it will be interesting to see how our inventory levels compare moving forward.
In Real Estate, a balanced market is 6 months of inventory. Today, we have less than one month of homes in the Sarasota/Manatee real estate market. Therefore, this reiterates the fact that we are NOT likely to see a balanced market for some time. Real Estate is slow to react and a good market or bad market can take years to level off. If you have been sitting back hoping that prices will drop in 2022 this will probably not happen.
CONTINUED APPRECIATION OR LEVELLING OUT?
Currently, homes in the Sarasota and Lakewood Ranch area are appreciating 2.5% per month. That used to be what we saw per year. Yes, we could see that change or even level off but what we will not see happen quickly is a price drop. There are simply not enough homes in our area to meet the demand at this time.
The next 12 months will stay busy with slowing appreciation happening toward the 3rd to 4th quarter of 2022. We know things will change but it will not happen suddenly. No One will ever be able to accurately predict the top of the market or the bottom of the market. It will happen gradually.
MY STATS
Keep in mind no one has a crystal ball and can predict the future. However, we learn each day and carefully watch a number of factors and trends to be able to educate our buyers and sellers.
I wanted to give a little perspective to start with because we are constantly hearing about bidding wars and how awful it is to purchase homes today. In 2021 28% of my sales were sold at full price, 34% of my sales were at above list price and a whopping 38% were actually sold for less than full price. Thus, keep in mind that not every home is selling at full price. And of these transactions, half were financed, buyers. Therefore, it is definitely possible to get into homes for under list price and without being a cash buyer. If you would like more information about housing in our area please reach out and let me know how I can be of help; 941-373-5880.
