Location, location, location.
The adage used to summarize the three most important factors in real estate and was the reason that buyers paid top dollar for a slice of Longboat and its surrounding keys. In a single week in May 2004,
Longboat, Lido, St. Armands and Bird keys saw 57 sales. Buyers wanted to close quickly on properties as values soared.
The real-estate market has since cooled off, but the good news is local real-estate agents are reporting an up-tick in interest. But, now, buyers want to know about more than location before they make a decision.
They ask the predictable questions about the real-estate market and whether or not it has hit rock bottom.
But they also inquire about things such as if a boisterous family Christmas party will elicit complaints from neighbors. Buyers who, in the past, might have casually inquired about flood-insurance costs are now insisting on a quote. They’re asking what could be built on nearby properties. Occasionally, they ask their Realtor for a hurricane forecast.
“People want to be here, and the phones still ring, but people are more conservative,” said Michael Bayer, broker associate at Coldwell Banker Residential Real Estate Inc. “Methodical, even.”
Know thy neighbor
When the real-estate market was booming, Marnie Matarese, sales associate at Re/Max Excellence, could count on three questions from prospective condominium buyers:
Can I bring my pet? What is the condominium association’s policy on renting out units? And, are condominium owners about to face a costly assessment?
Often, Matarese thought buyers weren’t concerned enough when she warned them about a board or policy.
Today, Matarese still hears those same three questions. But, now, instead of being among the only questions buyers ask, they’re at the top of a growing checklist of concerns that focuses not only on where the buyer will be living but with whom they will be living.
Buyers ask about condominium boards, wondering if members are friendly or if they nitpick. They want to know the community’s tennis court hours. They want to know about the swimming pool: Is it really heated during the winter? (Some boards have stopped heating swimming pools to cut costs.) And, if it is heated, is it kept at too warm of a temperature? Will I be able to hear my neighbor’s washer and dryer from my unit?
“It’s almost the way people look at schools for their children,” Matarese said. “They want to know the environment.”
At Prudential Palms Realty, sales associate Maureen Horn said that two recent clients read the minutes of every condominium board meeting before making an offer to make sure that there were no major disputes within the community or costly assessments that were likely in the near future.
“They’re investigating more than they ever did before,” she said.
Buyers are aware of their leverage in today’s market and the discounts that are available to them. But they also know that the costs of homeownership don’t end with the sale price. Now, more than ever, Realtors say that buyers want to know about true costs.
“People are asking about insurance quotes, electric bills, lawn maintenance,” Bayer said. “Buyers are much more cautious.”
Matarese said that buyers are concerned about association fees, which, for older buildings, can cost owners as much as $900 a month.
“It doesn’t matter if you get a great price on a unit if you’re going to make up your savings in assessments or maintenance,” she said.
Buyers are also concerned with the value they’re getting out of their purchase, particularly at the higher end.
Georgina Clamage, branch manager of Michael Saunders & Co.’s Longboat Key offices, said that demand is currently strongest for properties priced under $500,000. For more expensive properties, buyers are more selective.
“They’re looking for pristine,” Clamage said. “They want more amenities. If it’s not on the beach, they want to know that they have access to the beach.”
“The higher range has to be in pristine condition,” said Sheldon Paley, sales associate at Signature Sotheby’s International Realty.
Paley said that buyers want steep discounts, often asking for 30% off of a listing price. But, in many cases, the price has already been reduced by that amount. Clients also want more comparative information about recent home sales in a building or neighborhood.
“They’re asking what else is being sold, and they’re looking more at what was sold recently,” Paley said.
The flip side
At the higher end of Key real estate, buyers are choosey. But Realtors are finding that the opposite is true for low-priced properties.
During the boom years, Horn said that a client might have been able to find a one-bedroom, one-bathroom condominium with no view of the water or a home in a 55-and-up community for less than $300,000. Now, Horn said that at least four Longboat Key condominiums have units that regularly sell in that price range.
Elizabeth Gardini, of Michael Saunders & Co., listed a two-bedroom, two-bathroom home on a canal on Tarawitt Drive for $265,000 last week. Since then, she has shown the property 12 times and fielded multiple offers. The home needs major repairs, but the land alone has value.
Ray Alexander, broker/owner at Engel & Vöelkers Longboat Key, which absorbed Wedebrock Real Estate Co. earlier this month, estimated that 60% to 70% of the properties his branch is currently selling are short sales. Buyers have purchased homes that had mold on the floors and needed roof repairs because they knew that, despite repair costs, they were getting a bargain.
Realtors say that savvier buyers are taking longer, in some cases, to make decisions, but they’re still buying.
According to Bayer, who compiled sales data in six-month increments for the past three years for Longboat, Lido, St. Armands and Bird keys, in addition to other areas in Sarasota County, the number of Key real-estate sales remains strong, even though the median sale price is down (see box). Bayer said that Longboat Key had 65 sales in July and August, which could put it on track to have a stronger second half of the year than last year, which saw 121 sales for July through December.
Realtors say the drop in median sale price isn’t surprising given massive investment losses.
“It matches with what everybody lost,” said Horn, who sees clients who would have once been looking for homes priced at $650,000 seeking properties for $450,000. “They still want to be here, they still have the same plans, but they just have to buy lower.”
To see a sales snapshot, click here