Rising interest rates and prices can make purchasing a second home something of a risk, but the North Port-Sarasota-Bradenton metropolitan statistical area is still showing signs of strength for buyers seeking investment and future retirement properties.
According to financial services website SmartAsset, for 2021 the local metro area ranked 17th among 404 metros across the U.S. as a hot spot for second home purchases. The region trails three other metro areas in Florida, with Naples-Marco Island ranked third, retirement-heavy The Villages eighth and Cape Coral-Fort Myers 11th.
SmartAsset analyzed data from 2021, weighing the total number of mortgages approved against those for secondary residences over the same time period. The data does not include homes purchased with cash only. Of the 26,367 mortgages approved for the year in the local metro area, 9,350 were for secondary residences, or 35.46%.
That was 2021, in the height of the COVID-19 when Florida became one of a handful of destinations for people seeking relief from stricter lockdown states or taking advantage of remote work opportunities that allowed employees to work from just about anywhere.
The current mix of primary versus secondary home purchases has yet to be analyzed, but local real estate professionals say the second home market here shows a slight cooling, but still continued signs of strength.
"We typically see the most activity from purchasers acquiring a secondary residence in the first two quarters of the year, and this has been no exception for 2023,” said Evan Danzig, a luxury real estate agent with Sarasota-based Michael Saunders & Co. “In the past 30 days alone, we have seen this demand steadily increase from Q4 with continued activity coming from the Midwest the Northeast, and now even California.”
The demand for single-family homes and waterfront condominiums appears equally balanced, Danzig said, with the price range of $750,000 to $1.5 million being the strongest.
Those findings are similar to what Brian Tresidder, the 2023 president of the Realtor Association of Sarasota and Manatee, has seen. As sales manager at William Reavis Real Estate based in Siesta Key, Tresidder said country club communities and waterfront properties are equally popular.
“Most of the people we have walking into our office are who are looking at second homes are pretty much at $500,000 and up,” he said. “I would say for the most part we're seeing $700,000 to about a million is what a lot of buyers for the Siesta Key condos are looking for.”
Market-wide, Tresidder said most second home buyers seeking rental income are looking on or close to the barrier islands, where rental policies are less strict than in inland country club communities. They may be looking to eventually retire there, or are holding them as income properties.
“For second homes, you will have people that that purchase single family, but the majority of them end up in some type of condo, townhouse or duplex area closer to the beach where people are looking to vacation.”
As prices have stabilized and mortgage interest rates have risen sharply, sales in general have slipped to nearly 30% of the volume from the year prior. Still considered a seller’s market, Tresidder said prospective second home buyers are shopping, but trending more toward holding off on making purchases.
“We've seen people who are deciding to wait, whether it's because they're not finding the home they want even though our inventories have come up,” Tresidder said. “Prices shot up, interest rates shot up, insurance has gone up, and so there's not this rush for them to buy something that they may not necessarily like. A lot of them are waiting until they find the property that they like more than just settling for what's available and deciding on one of those.”
While mid-price buyers may be pressing the pause button, the luxury condominium market remains strong, as units in downtown and bayfront Sarasota condo towers are selling quickly.
“For those really high-end properties — those who are buying a $2 million or $3 million properties in Sarasota — we haven't seen them waffle as much as buyers who are closer to the medium price point,” Tresidder said.
As for specifically the luxury market, Danzig said, “We are predicting another very busy year ahead. "
For its analysis, SmartAsset culled data from the Consumer Financial Protection Bureau’s Home Mortgage Disclosure Act Database and is specific to owner-occupied housing that doesn't serve as a principal dwelling. Those include second homes, vacation homes and rental properties.
Andrew Warfield is the Sarasota Observer city reporter. He is a four-decade veteran of print media. A Florida native, he has spent most of his career in the Carolinas as a writer and editor, nearly a decade as co-founder and editor of a community newspaper in Mecklenburg County, North Carolina.