New construction continues to sell well and downtown properties are all the rage.
After flipping the calendar to a new decade, now is as good a time as any to examine the forecast for the real estate market. The Observer spoke with Joel Schemmel of Premier Sotheby’s International Realty, Candy Swick of Candy Swick & Company and Kim Ogilvie of Michael Saunders & Co. to gather their expectations for local real estate in 2020.
What’s hot for 2020?
Schemmel: I think the trends from 2019 are going to continue into 2020. So I think some of our hotspots last year were certainly in the ultra-luxury markets that were up significantly. And there’s no magic number for that, but I usually use the $5 million-and-up market. We’ve seen a substantial increase in the number of sales in 2019 versus 2018. And I think that trend will certainly continue into 2020. And that’s kind of leading the market to a certain extent. The downtown condo market continues to do very well and of course, the projects that will be finished in 2020, 2021 will show how strong that market is. The other market that has continued to bubble along is Siesta Key.
Swick: Value. It never changes. I’ve been doing this for 40 years. If it’s value, the market, the buyer knows it. The buyer is going to look at at least 16 or more properties. And then if they walk into something that they know is value as compared with everything else. It’s not rocket science, but it is always true. Value.
Ogilvie: The old real estate adage used to be location, location, location. Now it seems to be trending new, new, new. People really want newer properties, newer homes, so that’s a big trend. And then the other thing is there’s been a real increase in design. People really want modern contemporary design. And coastal contemporary is close, a close second. So that’s a real trend as well. Waterfront, we’re seeing a lot of moves from garden lots.
What is trending down?
Schemmel: I think there is more competition at the lower end of the market. So it’s looking at the $250,000 to $500,000. And maybe that $500,000 to $1 million, those markets are getting more competitive, meaning there is a little bit more inventory in that marketplace. Prices, if it hasn’t been updated and changed for today’s kind of higher palette, we’re taking a bit of a hit on those because the market does like newer.
Swick: If you have a property, that is a tremendous amount of work. There’s a lot of beautiful choices in new construction. So if something is a big project, that’s trending down. That’s more than somebody wants, especially when they can go purchase new, and it’s all done for them, and they can get it financed. Now there is an exception to that. And if what needs a lot of work is extreme value, then the people that it is their profession and their modus operandi to buy that which needs the work, at value price, they can put the sweat equity in it, they can put the money in it, and they can make a profit.
Ogilvie: I think the further you get away from the city center, it’s going to take a little longer on the market. I think that there’s such a focus on the downtown area now and just the immediate circumference around that circle, anything within, say, a mile or mile and a half of downtown is just super hot. So anything that’s not that, it’s not even that it’s trending down; it’s just taking longer to sell. And then we went through a period of time in the 2000s that were just wide open spaces. People went in and took walls down to create these kind of loft-like floor plans. Now that’s not so much, and not the high 20-foot ceilings. It’s trending more toward having more definition in a floor plan.
What is your general outlook?
Schemmel: For the first time, I see a general consensus across the Realtor community that it’s going to be a really positive 2020. We don’t see any real weak points. With the economy the way it is, with our kind of baby boomer growth, plus the tax issues have affected a lot of people in the Northeast and the high tax states. And so we kind of have this natural population growth; it’s going to continue to push our market positively. And despite the election year, which generally tends to slow the market a little bit, we don’t really see that much of a hit from that.
Swick: Fabulous. And the reason I say that is if you look at the trend of the U.S. as a whole, people can live in a lot of different places because of the internet and computers that they couldn’t before. And so now, the choice is, do you want to live in a beautiful environment with beaches and all the amenities except snow? Or do you want to live in a high-taxed area with snow and sleet?
Ogilvie: In Sarasota County overall, 2019 was another really good year in luxury sales, so that’s what we classify as a million dollars overall. There was a real consistent trend about the same numbers as 2018 and 2019. What we’re finding now and potentially coming up is there was a significant drop in resale luxury condos. So I don’t know how that’s going to be for future. But there were 139 units sold in 2018 versus 109 in 2019. So it was a bit of a percentage off. Plus we’ve had an increase in inventory. So we’re going to, I think, even see a shift in inventory and days on the market coming up. And all the new construction luxury condos that closed in 2018, and now you got 24 new construction luxury condos that have closed in 2019. So in our inventory for condominium buildings, it’s going to hit MLS as new listings now as a result of those two big years in building. It’s really hard to say what’s coming up, and it feels like as long as sellers really price their properties properly, we look like we’re going to have a really good upcoming year. The election years always bring interesting twists and turns. It’s just sometimes buyers pause before making those big decisions because a lot of our inventory is vacation homes. So sometimes election years do affect that. And the thing that continues to feed our market, and I think it will into 2020, are the tax changes in those key feeder states. That really fueled a lot of our sales in 2018 and 2019. So I think we’re going to see a continued flurry to take advantage of those people coming here while that’s still in effect. Maybe the closer we get to the election, some people do become a little skittish. So that’s just something to throw into the mix, but none of us really know if that’s going to affect it or if our positive features that I mentioned, as far as weather and arts and culture and shopping and all that, may just continue to outweigh that. It’s almost like if people were considering a move somewhere warm out of those heavily burdened tax states, certainly Sarasota is going to be on the top of their list.