34228 ZIP code had the highest median sales price for single-family homes in Sarasota County.
It was a year unlike any other for the Longboat Key real estate market.
Data from the Realtor Association of Sarasota and Manatee shows Longboat Key’s 34228 ZIP code had a median price of $1,475,000 for a single-family home in 2021, the highest median sales price of any ZIP code in Sarasota County.
“It was the year to have listings,” Longboat Key-based Realtor Reid Murphy said.
To compare, single-family homes for Sarasota’s bayfront-facing 34242 ZIP code had a median sale price of $1,395,000 and the downtown-based 34236 ZIP code had a median sale price of $1,250,000.
Michael Saunders & Co. broker-associate Michael Moulton explained why Longboat Key has the highest median sales price.
“It’s pretty simple,” Moulton said. “It’s because it’s on the Gulf of Mexico.”
Moulton said the cost of land in Longboat Key is higher than the cost of land on the mainland of Sarasota and Manatee counties.
Sarasota and Manatee counties had more than $15 billion in real estate deals in 2021.
Longboat’s 34228 ZIP code also had the highest median sales price among Sarasota County townhomes and condominiums at $720,000.
MLS data shows Murphy had a sales volume of about $172,020,000 in 2021. It is the highest total of Murphy’s career, which has spanned more than three decades. Murphy’s 2021 totals more than doubled his sales volume of $64.92 million in 2020.
Last year, Murphy was among 17 different agents in Manatee and Sarasota counties who had more than $100 million in sales.
In 2021, Longboat Key-based Roger Pettingell had $206,845,000 in closed sales, which is the highest total of his career. It surpasses his previous area records of $175.6 million in 2020, $117 million in 2019 and $106 million in 2018.
“(I) did this ad and it was like, ‘$100 million dollar man’…and, at the time like that seemed so insurmountable,” Pettingell said. “Like, I couldn’t even imagine reaching that number.”
Murphy said he realized early in 2021 that he would have a record-setting year.
“I don’t remember exactly, but three months into it I guess I pretty much knew it was on its way,” Murphy said.
Pettingell explained why the current real estate industry is considered a sellers’ market. He said sellers often have multiple potential buyers, which leads to multiple offers. Sometimes, it creates a scenario when potential buyers make offers well above a seller’s asking price.
“We’re in a market now that is so seller-driven just really because of the lack of inventory,” Pettingell said.
Moulton estimated that there has been less than one month of housing inventory for the past year or so. Data from the Realtor Association of Sarasota and Manatee backs Moulton’s claim.
“Typically, in our industry, six months of inventory — that’s the number of how many listings are there divided by the number of sales in a given month — six months is neutral,” Moulton said. “So when you having more than six months of inventory it starts skewing towards a buyers’ market, and as it decreases from six months, it skews toward a sellers’ market.”
Moulton mentioned that most of his transactions in 2022 were from unlisted properties. He said several factors motivate people to move to Florida, including the proximity to the water, the warm weather and no state income tax.
“(People are) working remotely and who knows if that will ever change?” Moulton said. “People don’t have to be in New York, Chicago (or) Boston whatever to work.”
Like any market, it’s tough to predict how long the record-breaking real estate market will last.
“I’m a proponent that, at some point, the annual appreciation is not sustainable, but that doesn’t mean it can’t slow down,” Moulton said. “I don’t see our prices going backwards. I can see them leveling off for a period of time.”
Moulton said two things would need to happen for the current market conditions to change:
- Either an increase in housing inventory or a lower demand of existing inventory
- An uncontrollable outside factor such as the COVID-19 pandemic, the U.S. housing crisis of 2008 or the Sept. 11, 2011, terrorist attacks
Working remotely due to the COVID-19 pandemic has also allowed people and working professionals to reevaluate where they live.
“In this market, kind of pandemic-driven, you’ve got people who are spending far more time in Sarasota,” Pettingell said. “It’s not just a second home getaway for a weekend.”
Pettingell said the market conditions are different than 2008, especially after laws changed in response to subprime mortgages.
“Now, 12 years later, we’re dealing with a lot of cash buyers or highly qualified borrowers,” Pettingell said. “So, we would not expect the market to turn back into the short sale kind of market, and we’re also protected in the market like Sarasota where you’re really seeing this migration come out of the northeast.”
U.S. Census Bureau data shows Florida has a population of 21,538,187 as of April 1, 2020. Ten years before that, Florida had a population of 18,801,310. Longboat Key’s population has also grown in the last decade.
Buyers in Longboat Key and the Sarasota area are seeking new properties. Pettingell said it’s changed his strategy when he represents sellers in a transaction, especially given the lack of housing supply.
“They used to say your first offer is your best offer,” Pettingell said. “It probably isn’t anymore.”
Pettingell said his strategy is to market properties to a wide net of people in a short amount of time.
“We want to get it out to as many people as possible to really create the urgency of the sale without the property lingering for a long time, which in this market could be two weeks,” Pettingell said. “If a property is on for a whole lot longer than two weeks, people think something’s wrong with it, so there’s a whole new strategy in how you deal with these sales nowadays.”
Another factor to consider is when luxury developments such as the St. Regis and Sage are up and running. St. Regis’ 69 residential units range from $2 million to $20 million, and there are 12 units left, according to signage outside of the development.
Sage has sold out its 16 units, which range from mid-$4 million to $6.3 million.
“I’m convinced that there are people that do not come to Sarasota because there isn’t a completely first-class place to stay in the beach presently,” Moulton said. “Now that the Colony is closed, that’s what the St. Regis will bring us eventually.”
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