Real estate leader Robin Sheakley, president of Sibcy Cline Realtors, received a text from a friend in Ohio asking for help in buying a house in Sarasota. Coincidentally, Sheakley happened to be in Sarasota at the time and was attending a dinner party hosted by Michael Saunders, founder of Michael Saunders & Co. Sheakley and Saunders see this as an example of the continued flow of homebuyers to areas on the west coast of Florida, despite some signs of weakness in the overall real estate market. They, along with four other realty brokerage leaders from around the state and country, spoke about the real estate market during a media session on April 26 at The Ritz-Carlton in Sarasota. The leaders were in town for a conference hosted by The Realty Alliance, a network of elite real estate brokerages across North America. They discussed the state of their home markets, trends, and what they see happening in Florida.
Inventory
Robin Sheakley notes that her company’s transaction volume in Ohio has decreased by 35% in 2023 due to a severe shortage of inventory. The other panelists, including Stephen Baird, President and CEO of Baird & Warner in Chicago, also report struggling with inventory. Baird, whose company is the oldest independent family-owned real estate services company in the U.S. and the largest independent real estate brokerage in Illinois, says his firm’s listings of homes for sale are down 50%. Despite high demand, they are unable to sell due to the lack of available homes.
Florida Pipeline
Despite facing challenges in the real estate market, including inventory shortages, the executives on the panel agree that Florida remains a popular destination for homebuyers. Ron Howard of John R. Wood Properties in Naples notes that many buyers seek second homes or condos in Southwest Florida for the weather and active lifestyle. John Horning of Shorewest Realtors in Wisconsin reports seeing an increase in dual ownership, with clients keeping condos in Wisconsin and buying another in Naples or elsewhere in Florida. Stephen Baird of Baird & Warner in Chicago also sees this trend, but believes the national stories of people fleeing Chicago and Illinois are overblown. Nonetheless, he recently opened a Florida office in Naples due to demand from his agents. Michael Pappas of The Keyes Co. in Miami says that people from the Midwest tend to head to the west coast of Florida, while those from the Northeast prefer the east coast. Some buyers are even purchasing homes in Ave Maria, 90 miles west of Miami, and commuting to Miami-Dade or Broward counties due to crowding in South Florida.
Insurance
Despite reforms to the state’s insurance market, affordable insurance remains a challenge for some homebuyers. Michael Pappas, president of The Keyes Co., notes that 80% of his firm’s clients are insured by Citizens Property Insurance Corp. due to lack of coverage options. Pappas also gives an example of the high cost of insurance in Miami, where he is paying $85,000 for insurance on a $3.5 million home. Some South Florida buyers in the higher price range have even decided to forego insurance altogether, according to Pappas.
Mortgage Rates
Panelists are advising clients that low mortgage rates of 3% or 4% are unlikely to return. However, Michael Pappas notes that even the current fixed-rate of 7.1% is better than it has been for at least 40 of the past 50 years. Buyers are being informed that this is the new normal, but they can purchase now and refinance later if/when rates go down. As Elizabeth Sheakley says, “you date the rate, but you marry the house.”
Design
Real estate executives see a trend towards more space, including backyards, pool areas, and ceiling heights, as well as better use of space, such as sliding doors. They note that the Mediterranean look is out and modern style is in, and that the outdoor lifestyle is popular. Michael Saunders & Co. has 20 sales offices and over 600 agents in Sarasota, Manatee, and Charlotte counties.
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