Monday, February 13, 2006

Sarasota Condo Market

An article published in the Wall Street Journal has been talked about extensively here in Sarasota. The article surveys the condo market in 5 US cities, one being Sarasota. The Sarasota excerpt is:

Sarasota, Fla.

IN A SNAPSHOT: An overbuilt downtown condo market is leading to incentives such as deals on beach-club memberships.

The downtown market has been on a tear since the Ritz-Carlton, which included 50 residences atop the hotel, was completed in 2001. More than a dozen condo projects have been built since then in this city of 55,000, and there are as many units under construction now as have been completed over the past six years. Plus, about 273 condos are on the market.

That's almost triple the amount of condos on the market here a year ago, according to real-estate firm Michael Saunders & Co. And more continue to be announced, including Marquee on the Bay, a 16-story tower with 12 units starting at 4,750 square feet for $3 million, and the Grande Sarasotan, with 144 condominium units priced from $1 million to $3 million.

"Where are the people going to come from?" says broker Barbara Ackerman, who predicts the median condo price in downtown will drop a "minimum of 10%" this year.

January is typically a slow month here, but this year there were six condos that resold, down from 14 in January 2005, according to Michael Saunders & Co. It's no longer uncommon for sellers to offer hard-to-get golf and beach-club memberships, which can cost as much as $75,000 apiece. Bert and Jane Kummel, retirees who put their three-bedroom condo on the market for $2.4 million at Thanksgiving, have thrown in $1,000 worth of opera tickets as a lure. But to no avail, says Mrs. Kummel: "It's a great marketing idea, but people just aren't buying like they were."

The other city "snapshots" are:

: To drive up sales and per-square-foot prices, developers have shrunk condo units 12%.

: Median condo price per square foot rose 11% last year to $617; existing condo sales fell 30% from a year earlier.

: While a major correction is unlikely, local analysts say they expect a lull in the market.

San Diego
: Prices dropped from the end of 2004 to the end of 2005 -- the first such drop since 2001.

The article indicates that 759 condos have been built in downtown Sarasota since 2000, and that 1263 more units are either under construction or have been approved. The article also says that one year rise in condo resales is about 200%.

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