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Sarasota Real Estate Ends 2013 On A Lasting Upswing
The Sarasota real estate market doubled its performance from December 2012, as single family properties ended the year selling at $189,950, a 15.1 percent increase from $165,000; and, condos recording a sale price of $182,000, a 10.2 percent increase from $165,100 in December 2012.
There were more homes sold in December 2013 than in the year prior, with 920 total properties, of which 621 were single family properties and 299 were condos. In December of 2012, those figures totaled 906 sales, comprised of both single family homes and condo units.
In addition, December 2013 outpaced the month prior to November by 16.9 percent. In November 2013, there were 787 sales, however, the whole year ended on an upswing, with a total of 11,184 sales throughout the county, the second-highest figure ever recorded.
Sarasota Homes Record a Median 20 Percent Price Increase in Y-O-Y Figures
Median prices also saw a jump from 2012 to 2013 in the same month, with single family homes coming in 20 percent higher at $184,900, up from $155,00; while condos fetched a rolling median price of $164,900, a 10.1 percent increase from $155,000.
“Overall, December 2013 was a great month for real estate in our market. Many of our winter residents and visitors seem to have turned their attention to buying and selling homes. This could be partially attributed to the recent news that predicts increases in mortgage interest rates in 2014. Also, as homeowners see their properties appreciating in value, many are no longer under water and are now able to put their homes on the market,” SAR President Peter Crowley remarked about the 2013 figures.
Sales of Luxury Homes Still Strong in the Month of December
The luxury home market also did quite well in the month of December with 27 luxury properties selling across the county for over $1 million. Of the 27 luxury estates sold in December 2013, 1 sale occurred in Bird Key, 1 in Founders Club, and 2 in Harbor Acres.
These sales outperformed November luxury transactions in 2013, when less than half, 12 luxury properties priced over $1 million sold. It also outpaces October 2013, when 11 luxury homes sold in the county of Sarasota.
Future Sales Predictions
Economists and real estate experts alike agree 2014 will see changes in the market. Key indicators point to rising mortgage interest rates as the Federal Reserve begins to slow its economic stimulus program known as quantitative easing. As the bond-buying program winds down, not only will interest rates likely increase, but banks will begin to take many distressed properties off their books.
Sarasota Real Estate Market Catches Fire In 2014
The Sarasota market showed continued signs of strong growth in January, with new listings increasing 10.6 percent from December, bringing available inventory to a 32 month high. Historically, an increase of new listings transpires following a market upturn. This instance appears to be no exception to that phenomenon as inventory levels are a full 30 percent above the most recent low, which occurred in July 2013, only six months prior.
What’s more, the real estate market in Sarasota County is capturing more appreciation when comparing January 2013 to January 2014. For instance, the median sale price rose 21.3 percent for single family residences and 17.1 percent for condo units. In the past 11 months, though prices are substantially higher than in January 2013, prices have sustained a narrow trend. Experts assert such a trend line indicates a healthy market, especially due to the conspicuous absence of wild fluctuations, and without unsustainable price appreciation that was experienced in 2004-2006.
Sarasota Homes Record a Median Price, Pending Sales, and Closed Sates Increase in Y-O-Y Figures
In three categories, the Sarasota market upped its year-over-year figures: median price pending sales, and closed sales. The median price recorded a 20 percent increase, rising to $187,000 for single family properties, and $165,000 for condos, up 10 percent in Y-O-Y numbers.
Meanwhile, pending sales likewise rose substantially in the past several months. However, January 2014 pending sales were slightly lower than January 2013. Economists consider pending sales to be a solid indicator of a healthy market and a good forecast model for future sales.
“The fundamentals of the market would certainly indicate a solid spring ahead. The state tourism level just hit a record high. We have had a mild winter while the northern states have experienced heavy snowstorms, and that tends to drive the level of visitors up. Once people see what Sarasota has to offer, many tend to want to relocate. And that’s where our members can certainly help,” Sarasota Association of Realtors President Peter Crowley said.
Closed sales saw a 10 percent increase from last January, but recorded a moderate decrease from December 2013. This represents a long standing historical trend as consumers tend to purchase properties prior to a calendar years close to leverage tax advantages. In recent years, closed sales have risen significantly beginning in February and continuing through June.
Thus far, 2014 shows all the signs this trend will continue to unfold through this coming spring. Sarasota closed 2013 with the second highest number of sales ever recorded in the MLS, counting 11,184 and the strong start of 2014 appears to set the tone for the rest of the year.
Sales of Luxury Homes Fall but Remain Active
In the month of January, there were 15 luxury home sales over $1 million, down from December 2013, when 27 luxury properties sold. The difference is likely due to homebuyers with the means to purchase a luxury estate trying to capture tax benefits before the close of the year. However, January’s total outpaced November of 2013, when 12 luxury homes sold for over $1 million. Last month also out performed October 2013, when 11 luxury residences sold in Sarasota County.
The Risks of Holdover Rentals for Home Buyers
You’ve found just the right property for you and your family and put in an offer. The seller has accepted and it’s nearing the final walk through and closing. You’re working overtime trying to coordinate the move and have been packing stuff up like mad. You’ve even taken the time to make a donation pile and a yard sale pile, so the move goes a bit smoother.
Now, as the day nears you are ready to move into your newly bought property, you get a call from your buyers agent. In a few moments you learn the sellers agent just phoned and wanted to know if you were open to a “holdover rental”, but that term is completely foreign, so you ask what it means.
The agent explains it’s a situation in which the seller isn’t yet ready to move and needs some extra time to stay in the home you just bought. At first, you’re shocked and disappointed; then, you begin to think it over. It would give you more time to move and that’s a good thing, but if you’ve already sold your home, this might not be a viable option. Aside from that, there are other reasons not to agree to a post-closing possession.
Putting Together the Right Post-Closing Possession Agreement
If you can give the seller more time in the home, it’s possible to agree to a rent back, but it isn’t as straightforward as just signing a lease. First and foremost, it shouldn’t be a lease because that does more than just imply it’s a rental. Which means legally if there’s a problem, like the seller staying past the agree departure date, you might have to go through an eviction process.
To avoid this, you should have a license agreement created by a real estate attorney so you can revoke it immediately if the agreement is breached However, you might not even get this far, because first, you’ll have to get the green light from your home insurance company as well as your mortgage lender. Additionally, if the property is under a homeowners association, there might be more obstacles. These potential pitfalls are only the beginning, there are risks associated with holdover renting.
Risks of Renting Back to Sellers
Let’s suppose you get permission from your homeowners insurance, your home loan lender, and the HOA; now, you’ve still got a few big risks ahead if you go ahead with renting back to the seller. In fact, most real estate professionals and attorneys will tell a homebuyer to delay the closing rather than agreeing to a rent back because of the following risks:
- Damage to the property. Anything is possible and although the sellers might be good people, all it takes is one guest to do a whole lot of damage. It could be practically anything, such as accidentally leaving a sink on while away for a weekend or a kitchen grease fire. If there is damage done to your property, it will be a long and hard road to sort out who pays for what; and, you’re likely to have big issues with your homeowners insurance company.
- Not leaving by the agreed date. Of course, this is probably the most realistic risk to come to fruition. The world of real estate transactions don’t always go as planned and a seller renting back might be waiting for another seller to find a property to purchase before moving. It’s a complicated matter and one you don’t want to be subjected. A penalty of a few