Sarasota-Manatee condo market dips, while single-family home prices remain high

After years of fewer homes for sale than usual, the local real estate market has noticeably shifted in early 2024, with a major milestone that indicates trends now put buyers on equal footing with sellers, and in some instances, buyers now hold the dominant position.

The number of single-family homes for sale in Sarasota and Manatee counties has surpassed the high point prior to the buyer-induced frenzy that occurred after the COVID pandemic set the real estate market on fire across the country.

The number of homes on the market throughout all of 2021 and the first quarter of 2022 had hovered around 1,000 properties, but homes for sale have increased by a factor of five since those record lows.

Statistics maintained by Premier Sotheby's International Realty that includes most of the first quarter of 2024 put the total number of single-family homes for sale in the two-county region at 5,861 — slightly higher than the first quarter of 2019, when 5,807 homes were listed for sale.

However, the average price of $739,512 for a single-family property set the record in Sarasota-Manatee by more than $35,000 this quarter, indicating that even while buyers have gained a foothold, sellers still remain in a strong position.

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The condo market is a different story, with buyers clearly holding the advantage in most segments of that market.

At the end of 2021 just 346 condos were listed for sale in the two-county area. Near the end of the first quarter of 2024, 2,808 condo properties are included in the local multiple listing service — an even larger percentage increase than in the single-family market.

"That's big," Craig Cerreta, co-managing broker at Premier Sotheby's International Realty's Sarasota office said.

Average condo home prices declining in Sarasota-Manatee

Average prices have also been on a downward trend since the third quarter of 2023 in the condo market when completion of a new luxury tower at the Quay is removed from the statistics. Bayso Sarasota, an 18-story luxury condo tower with 149 units, caused a spike in average price at the end the year as all those sales hit the market at one time.

However, the veteran Sarasota real estate professional isn't ringing the alarm bells given demand for Sarasota Real estate remains high, Cerreta said.

"Demand has eased," he said. "But it hasn't fallen off a cliff."

He points to similar demand levels, measured by the number of closed sales, being down only 5% compared to 12 months ago in the condo market.

Waterfront properties in Sarasota and Manatee counties still in demand

Veronica Murphy, a Siesta Key Realtor with Keller Williams on the Water, said that it's not all segments of the condo market that are struggling, pointing to well located, waterfront properties still in high demand and newer buildings doing even better.

"It all depends," she said. "The condo market is having some challenges, especially in the older properties, we're seeing some hesitation."

Tanya Keith, the director of sales for the Bath and Racquet Residences and Club, heads sales for a pre-construction project off Tamiami Trail near the Trader Joes about two miles from Siesta Key.

She said she's not seen the same decline in demand or concerns that older properties have experienced.

"In fact, it's the exact opposite," she said. "We've been selling quite well."

The first phase in the more than 200-unit development has nearly sold out, with several units in the second phase of the project already sold as well.

Post-Surfside condo regulations leading to cost increases

Murphy said that part of the hesitation from buyers revolves around new legislation passed a couple years ago after the collapse of Champlain Towers South in the South Florida community of Surfside. That disaster killed 98 people and resulted in new regulations that required more inspections and better funding of condo association reserves to cover pricy maintenance.

Some condo associations have hit members with large special assessments or increases in condo association monthly fees to shore up shaky reserve funds or complete needed repairs in preparation to comply with the new legislation.

There have also been large increases in insurance costs across Florida, but even greater increases in older condo buildings, she said.

Cerreta agreed with Murphy's assessment, noting that while there will be some pain in the condo market as some associations fully fund their reserves, it may be a temporary situation.

"In the long run, this will create a better situation, but in the short term your fees have significantly increased," he said.

Cerreta called the current single-family market "a classic balanced market" for anything under $2.5 million, while anything over that favors buyers. He said because owners in the over $2.5 million market usually don't have pressure to sell, prices have not come down for that segment, despite the shift to a buyers market.

The condo market, though, has shifted firmly in favor of the buyer, he said.

Murphy, who has been a Realtor in Sarasota since 2014, said the current market reminds her of 2019. She said during the pandemic buying frenzy, properties often sold on the first day they hit the market.

"You couldn't even get into see something," she said. "It was crazy."

Now, a property will sit for two to three months or sometimes longer.

Managing market expectations

This has made it more difficult to manage seller expectations as some of their former neighbors sold properties in days, not months.

"You have to manage expectations upfront," she said.

Gena Faso listed her condo property on Siesta Key for sale by owner about three months ago. The 1,012-square-foot apartment in the White Sands Village condominium was built in 1975.

She's not selling because of any looming special assessment, and her two-story building will not be required to meet the stricter reserve requirements imposed by the state as those requirements were limited to three-story structures.

Faso currently lives in Chicago and bought the Siesta Key property because she loves the area's white sand beaches where her family has vacationed for nearly 50 years. She's only selling the property because of personal reasons that have limited her use of the property this year.

Still, she's found a tough market for her condo, despite one neighbor selling their property for $575,000 not too long before she listed hers for $529,000.

"I know I'm priced right where I should be," she said.

Her condo fees have doubled since she purchased the property in August 2017 and the property taxes have also gone up significantly.

She said increases in insurance and the higher fees are a big topic of conversation among White Sands residents given recent headlines about the surge in costs in the condo market.

Her cousin owns a condo in St. Petersburg where the association recently assessed a $40,000 special assessment.

When she put her property up for sale at the beginning of the year, she did get an offer almost immediately, but they pulled out of the deal almost as fast.

She still fields about five calls a week about the property, but hasn't had any other serious offers.

"They were concerned about the future of Florida," she said of the potential buyers. "Honestly, it's making me a little nervous."

This article originally appeared on Sarasota Herald-Tribune: For first time in years Sarasota-Manatee condo market tips to buyers