Is Sarasota in a bubble (Bradenton, University: rentals, condos, new house)

[techie_g]

@Beth It's pretty clear that we are in a mini bubble. No markets go up in a straight line forever. You are correct to wait a bit. It's also clear that all markets are local, but we've seen this movie before - more than a couple of times. Also, we're beginning to see another round of creative subprime financing without calling it 'subprime'. Wall Street always has an appetite for inventive bond issuance and the pipeline in becoming full, once again of paper to have the cash flows sliced and diced into different traunches for greedy institutional investors. Watch out. Everything around the SRQ area is top heavy. Can it be sustained?? well, there are lots of fools moving in to prop up the already overpriced market, but that too can only last so long.

[logybogy]

You really need to watch the stock market and the progress with the "Trade War" and its effects on economic growth and risks of recession.

Sarasota is a heavy retiree fueled market dependent on investment income. The stock market will influence confidence. If it continues to tank into 2020, that's a problem.

The economy is humming along fine *right now*, but the yield curve has inverted which has been a reliable indicator of recession within 18-24 months. Manufacturing is in decline right now because of the trade war. On the other hand, the American consumer continues to spend, gas/oil prices are low and getting lower, the Fed is easing interest rates, mortgage rates are at near record lows.

It's a 50/50 coin flip quite honestly which way this goes. Recession or not, things are going to be very volatile and unpredictable until after the election. It's not unreasonable to hold your fire and wait to see how things shake out.

[techie_g]

There are those among us and in the media that are talking UP recession for nefarious reasons as well - I don't think anyone should be in a break-neck hurry at all ! Just look at all of the new dirt that is being moved around even now for houses to come on line in six to nine months- you will have numerous competitive choices moving forward. Please do know that there are many new homes being built and completed by builders all around such as Neal Communities and Taylor Morrison, that are stupidly overpriced, particularly most of the designs by Neal Communities, which is one of the biggest offenders or common sense pricing that I have seen here - particularly is their scam of the "Design Center" where they really really rip you off. National builders such as Lennar/WCI don't play that game extensively at all. I would never buy a house from a builder who plays that offensive "Design Center" add-on scam.

[Edvard]

Very well said, techie_g

[NeedsinfoMN]

https://finance.yahoo.com/news/50-ho...090000594.html

Sarasota #45
Bradenton #27

[joshan]

nice article, thanks for sharing.

[beach43ofus]

Prices are still climbing for both Bradenton & Sarasota. Sarasota's 2 year climb is 5.6%. I don't see that as being a market in trouble. I do feel like the builders are creating gross over-supply in both markets though. I'd be very careful about buying in a new home community right now unlesss it was more than 1/2 sold out with all promised amenties in place.

I'd also be very careful about placing a deposit on a high rise condo downtown SRQ unless it will be completed w/in 1 year. Otherwise, I'd buy pre-existing right now.

No doubt, the media is trying their level best to install fear in consumers to cause a recession, which could mean a housing bubble, and it's probably having some success. However, Florida's attracting more affluent retirees than ever before, so they are better prepared to weather any storm that comes along. They are driving the prices up with all those $1M+ high rise condo's downtown. SRQ is nearly built out, so prices will continue to rise in the near-term.

Now is still a great time to be a Realtor, or to be in any Real Estate related business, in this forum area. Most of the macro economic indicators remain strong. The exodus of well-to-do Northerns will continue to come for our weather and low taxes. I see no end in site. This season will be much busier than last season.

We are getting near the end of the baby boomer wave though, so the demographics will eventually catch up to our housing market. I just dont see it happening in 2019. Late 2020..perhaps.

Northerners not being able to sell their existing homes due to bubbles up North, and crazy high property taxes, may be doing more to slow things down here in SW Florida than any other factor. I know quite a few of these trapped homeowners.

[blueherons]

When we were living in Sarasota in 2012, the Tampa paper had a big article about how one of the big hedge funds bought up 22,000 houses in the area. Anything under $150,000, and back then you could buy a 3/2 pool home for that in decent neighborhoods, was snapped up within days of being on the market.

What we found after this last recession is that Florida real estate, like New York City, Southern California, and a few other places, bounced back first. Even is bad as the recession was for a lot of people, internationals were still investing in our economy because the dollar is healthy and strong.

My point is that Florida real estate will hold its value if something happens again. It will not dip like it did.

[Edvard]

As storms hit east of us or in the islands, a LOT of people relocate here too. There's no way not to have noticed that.

[Jo's Garage]

I have heard people say that when the BBers are all retired that will be the end of the Florida market but just think about who is going to inherit thier wealth. Gen Xers for the most part are doing well already. The oldest are pushing 50 and are already planning a Florida retirement. It's their kids that I worry about.

I would be curious to know the population gain per day (now) compared to the last seven years.