Do you think the real estate market will be good this time next year? (Sarasota: 2014, to rent)

[MattMN]

Plenty of people are thinking we are nearing a bubble, but no one can really predict that. Certainly the practices that led to the massive recession are no longer in play, so we should not see anything so drastic. But there is certainly enough projected demand / population increase in this metro area over the next 20 years, that it's hard for me to believe this housing market could sustain a big price drop for very long.

[MattMN]

For reference, @Xia Chen is incorrect and perhaps a little jaded. Most certainly, homes in the Sarasota area specifically are fetching a premium. But is this "stupid"? No. Just like most all real estate, top locations will fetch premium prices. Enough people want to be in Sarasota, or near its beaches, that there is enough demand to get the prices. It's not stupid for builders to charge amounts that buyers are willing to pay.

1700 sq ft for $350000 may seem like a stupid way to spend your money for some, but for others it's a worth it for the location of the place. If you don't like it, you can find the same 1700 sq ft villa 40 minutes away for 2/3 that price.

[CapnTrips]

For what its worth, we are a retired couple planning a move to Sarasota in spring 2017. We have been faithfully following RE prices in Sarasota area for about two years now, and are well aware that prices in Florida (and everywhere else) are cyclical. When we sell our home in NoVa we will park the proceeds in a Fidelity short-term bond account that will provide enough income to rent a nice apartment in Sarasota for as long as we like.
Every step of the way we will drawing comparisons between the cost/benefits of renting and buying at any given time. When we think that home prices are close to bottoming out we will look into purchasing a home, if we find one we like, but we are not so foolish as to buy a house simply because we have cash and can afford a nice home for a lot less than what we received for ours. No doubt there are people who think that way, but not everybody is that foolish.

[duffer47]

If and when housing prices bottom out, your guess is as good as mine. Some things to consider:
1. Do you wish to live in a house, villa or condo?
2. Do you wish to do any upkeep and maintenance? Condos and villas often don't require any upkeep on the exterior and landscaping but you will have to pay an HOA fee.
3. Do you prefer living in a city environment , small town or rural? Is a gated community important?
4. How important is it to be near the beach, shopping, cultural activities etc.?
5. Do you wish to build up any equity or will your residence to children, grandchildren?
6. More baby boomers are retiring every year, so it seems logical that demand will continue.
7. Construction costs continue to rise on new residences that may affect existing homes.
8. Are you comfortable living in a place that is not yours and may restrict what you wish to do?
9.Rents will probably continue to increase each year and you have to be prepared for such.
10. Continued low mortgage rates are driving home construction and buying. When will these low mortgage rates start to increase?

[Xia Chen]

Originally Posted by CapnTrips

For what its worth, we are a retired couple planning a move to Sarasota in spring 2017. We have been faithfully following RE prices in Sarasota area for about two years now, and are well aware that prices in Florida (and everywhere else) are cyclical. When we sell our home in NoVa we will park the proceeds in a Fidelity short-term bond account that will provide enough income to rent a nice apartment in Sarasota for as long as we like.
Every step of the way we will drawing comparisons between the cost/benefits of renting and buying at any given time. When we think that home prices are close to bottoming out we will look into purchasing a home, if we find one we like, but we are not so foolish as to buy a house simply because we have cash and can afford a nice home for a lot less than what we received for ours. No doubt there are people who think that way, but not everybody is that foolish.

Many people just like this happening now,, that may point ha ha
Plenty of foolish buyer
Just because you can afford to by overpriced house doesn't mean you're wise man
Maybe who does this is a foolish buyer ha ha
Nobody ever admit to making bad deal, this area known for that, it's every where
Everyone want to feel good about spending money, even when its stupid

[CapnTrips]

Originally Posted by duffer47

If and when housing prices bottom out, your guess is as good as mine. Some things to consider:
1. Do you wish to live in a house, villa or condo?
2. Do you wish to do any upkeep and maintenance? Condos and villas often don't require any upkeep on the exterior and landscaping but you will have to pay an HOA fee.
3. Do you prefer living in a city environment , small town or rural? Is a gated community important?
4. How important is it to be near the beach, shopping, cultural activities etc.?
5. Do you wish to build up any equity or will your residence to children, grandchildren?
6. More baby boomers are retiring every year, so it seems logical that demand will continue.
7. Construction costs continue to rise on new residences that may affect existing homes.
8. Are you comfortable living in a place that is not yours and may restrict what you wish to do?
9.Rents will probably continue to increase each year and you have to be prepared for such.
10. Continued low mortgage rates are driving home construction and buying. When will these low mortgage rates start to increase?

Its not possible to tell when prices actually hit rock bottom, anymore than its possible to do that in the stock market, but anybody who watches price trends over a long enough period of time can tell in what direction they are moving, and like the stock market, it is possible to catch home prices "on the rebound" near the bottom of the curve. Certainly its possible to avoid the top.

As to rents going up, so do taxes, not to mention the different types of insurance that are necessary to own a home in FL, as well as the costs of home maintenance. Don't get me wrong, we'd prefer to be home owners, but as has been discussed here on CD before, the decision whether to rent or buy is a complicated one, based on both personal preferences and objective factors. It is by no means always true that "the time to buy is now!" although I've never heard a RE professional say otherwise.

More baby boomers are retiring every year, but that doesn't mean that they are all going to the same place. And, while there are people who really have to have their own home and will pay whatever they have to pay to get it, there are those like us who can be happy renting for an indefinite period if they perceive that to be the more financially advantageous plan. I marvel at people who move into a new area and immediately buy a house, or who buy a house without much knowledge of the area or the market, and instead rely solely on the word of an interested stranger that they are getting a good deal for their life savings.

[bbronston]

Originally Posted by CapnTrips

It is by no means always true that "the time to buy is now!" although I've never heard a RE professional say otherwise.

It's not always true that the time to buy is now. There you go....now you've had a RE professional say otherwise.

As for deciding on buying, renting, timing markets, etc., I mostly agree with you although I will note that many people don't want to live under someone else's property ownership. They may want to do things with their property that can't be done with a rental. Or, they might not want to pay rent for any reason. For them, concerns about market cycles are less important than their other concerns.

There are solid arguments for every facet of that decision process but it comes down to what each person wants for him/herself. I don't think anyone can decide for another that they are right or wrong because each has their own criteria.

[CapnTrips]

Originally Posted by bbronston

It's not always true that the time to buy is now. There you go....now you've had a RE professional say otherwise.

As for deciding on buying, renting, timing markets, etc., I mostly agree with you although I will note that many people don't want to live under someone else's property ownership. They may want to do things with their property that can't be done with a rental. Or, they might not want to pay rent for any reason. For them, concerns about market cycles are less important than their other concerns.

There are solid arguments for every facet of that decision process but it comes down to what each person wants for him/herself. I don't think anyone can decide for another that they are right or wrong because each has their own criteria.

Well said! Tho you're not actually saying that "now is not a good time," I appreciate your meeting me halfway.

I agree 100% about the decision to rent or buy. I really wasn't trying to bash anybody here. My intention was to point out that not all buyers have the same knee-jerk reaction to rising prices. Some people actually do some research, rent first to get to know the area and the market, and think hard before they spend almost every penny they have.

[bbronston]

LOL...well, I can't say that if I stay consistent with my principle. The most I can say is that, for some people, now is not the best time but that doesn't mean that the time will be better in 6 months or a year.

I spent time with a couple from MA a few weeks ago. They have been viewing properties I sent them online for months and came down to buy but their plan B was to get a rental as a temporary base while they home search at their leisure. Unfortunately, they couldn't decide on a purchase so I got them an annual rental starting in December. You know what they say about life being what happens when you've made other plans. In their case, either outcome was right for them even if they would have preferred to purchase and move one time.

[dotbowels]

We had never been here before. Came down here in the summer of 2011. A RE PRO whom we'd never met showed us around. We picked an area where homes had gone for as much as 40% off.
The agent showed us comps in the area. The bottom had been reached and prices were going up.

We ended up paying about 33% off the peak. Now 5 1/2 years later the exact homes around us are going for 40% more than we paid. I'm normally not that lucky. You have to have the right agent!

Had we rented we may have never bought because we would have learned/experienced the traffic issues here in season.

Fortunately we won't lose if we sale & move on.