Late season rush propels Island real estate
Many Island real estate agents say that in the first few months of 2009, their offices were buzzing with inquiries about Island properties.
Did those inquiries turn into sales, or were people expressing only a casual interest?
At first glance, it would appear that many prospective buyers were “window shopping,” as one agent said.
Indeed. The area’s multiple-listing service shows that just 10 Island single-family homes closed in March, along with five condominiums.
But as the late Paul Harvey would have said, “Now for the rest of the story.”
The MLS figures also show 22 single-family Island home sales pending closure and 20 Island condominium units in the same position.
Most, and probably all, of those pending sales will close, said Barry Gould of Island Vacation Properties. That would translate into 55 real estate sales since March 1.
“March was a very positive month for the Island,” Gould said. “From what I’ve seen and heard, we’ll also have a lot of April sales that will close in May.”
Gould noted there also have been a number of unrecorded sales, such as “by owner,” that are not in the MLS system. He knows of two such properties and estimated more private sales have taken place recently on the Island.
Buyers appear to have found value in condominiums and investment property, Gould and other agents said.
“Investment property is the hot market for buyers,” said Jason Sato of Sato Real Estate in Anna Maria. “We’ve had an incredible amount of walk-in traffic and many of them were looking for an investment.”
With vacation rentals up 20 to 30 percent this winter season compared with last year, prospective buyers are focusing on investments with a return on their money.
“People have seen how well the winter rental market has done. They figure they’re getting a good buy,” said Sato.
Asking prices are as low as they are going to get, he added, and that translates into some good bargains.
“Prices are at the bottom. They are not going down further, so the time to buy is now,” Sato said.
The average Island sale the past three months has been for $550,000, while last year at the same time, the average selling price was $489,000.
“I don’t know if that’s a trend, but I do know that sales prices have held steady the past six months,” he said.
Gould also has seen some good buys in the second home market, but many investment property purchases have been for cash.
Banks are loaning money for a single-family home or for a second home, but appear reluctant if the buyer already owns three or four homes, he indicated. The people with cash are getting the good values in investment property, Gould said.
“The rule of thumb is never pay more than 10 times the annual rental income. When people see that vacation rentals have jumped 20 to 30 percent this year, they can do the math and find a good value on an investment property.”
Condos go low
Quite a number of the bargains appear to be in the condominium market, Gould observed.
Many condominiums are priced in the mid-to upper-$100,000 range, and the five closed and 22 pending condo sales indicate people are finding value for the price in that market sector, he said.
Gould noted that one recent condo foreclosure sale was for $109,000.
Buyers generally are from the Midwest and Great Britain during the winter season, but Sato is hoping that some positive publicity about Anna Maria Island in the March 22 issue of the Hartford Courant will translate into New Englanders discovering the Island and its real estate market.
“The lady who wrote the story rented from us and fell in love with the Island. We even got a mention in her story. We normally don’t get a lot of people from New England walking in to look at property, so we’re hoping this story will generate interest,” he said.
Island not the mainland
Sato also said that a recent news story that home sales in Florida are up 20 percent compared with last year at this time doesn’t apply to the Island.
Those sales were predominantly mainland foreclosure sales to first-time home buyers, Sato indicated.
But Island real estate sales are on the upswing.
If the 42 pending contracts all close and are added to the 15 known closures since March 1, the 57 sales would indicate a considerable jump when compared to 2008. For the three month period from Feb. 1, 2008, through the end of April 2008, just 64 properties closed, according to MLS figures.
“The market is steadily going back up,” said Gould.
While the sales numbers are not at the dazzling heights of three and four years ago, buyers are plunging into the market, Gould said.
And there have been some foreclosure and “short” sales on the Island, he added.
A “short” sale is when the mortgage holder, usually a bank, accepts an offer for a purchase that is less than what is owed on the property. While not common for the Island, such sales can be found, but they usually are not on the market long.
“Buyers will find some very good bargains out there,” he predicted, echoing Sato and Jesse Brisson of Gulf-Bay Real Estate.
The test results for the winter real estate market will show in May and June closed sales figures.
Brisson said many people like to wait until the end of the season to make up their mind. He predicted a lot of buyers are now jumping into the market. Any sale in late April might not show up in the MLS until late May or early June.