Here We Go Again

Once again we are in the news, this time for being the second highest real estate market in the country when measured by how fast home prices are rising - can you believe Bradenton is first?

While speculators think this is wonderful news (and real estate agents might think likewise), the more you think about this, the more you wonder how good this trend is. A look at the CNN story about this shows that Sarasota is 17th in the country when measured by median home price. At $326K, Sarasota trails 6 CA cities, Honolulu and a handful of large metro areas.

Compare this to a study about the effect of second homes on the economy of a resort city (Vail in this case). Among other things it seems that rapidly rising home prices are changing the community and the economy. Vail is seeing the emergence of three communities:

• Those that own homes
• Those that build the homes and provide service to the home owners
• Those workers that serve the tourists

The home owners are mostly part year residents, thus increasing the effect of the seasonal swing in the local economy; the resort workers are increasingly foreign workers that work only for the season; and the local people that build the homes and provide services to the home owners struggle to find places to live in the local area.

This appears to be a story similar to what is happening in Sarasota. Home prices are high and rapidly rising. Homes are only affordable to people looking for a second home. Year round residents struggle to find affordable housing (unless you were lucky enought to have bought a home years ago). We are trying to diversify our economy, but success is difficult to achieve - although hope springs eternal. The attractiveness of our resort and cultural amenities attracts people with money and a desire to live (part time?) in a great, small city. Meanwhile the speculators are happy to try their luck at profiting in a "hot" market.

Sarasota and Manatee home growth also is driven by demand from people working in the Tampa area but wanting a better place to live - smaller city, more livable. Classic bedroom community.

We need to be aware of the changes that are happening and the implications of these changes to our current lifestyle. In a period of great change, many unforeseen changes will occur. We hope our leaders and planners are up to the task of thinking about the long range implications of the decisions they make or do not make today.