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Luxury Real Estate Looks Poised to Lead Market Rebound

Economic activities in Florida started humming anew moving onward this May. Malls, restaurants, and beaches have reopened in Sarasota, although generally under the new norm of “social distancing” foisted to us by Covid-19. The good thing also is that this early, the spearhead of a real estate market uptrend looms apparent in the Sarasota luxury segment.

Despite the widely foreseen global economic downturn resulting from the Covid-19 pandemic, the high-end residential property market so far has shown remarkable strength. Amidst the pandemic’s jitters in March, sales rose nearly 19 percent for Sarasota residences priced from $1 million and over.

The median time to contract for luxury residential sales moved faster at 34 days. This timeframe represents a 60 percent cut compared with March last year. It further indicates that the home selling process in Sarasota remains running smoothly, even with the imposed remote work circumstances of the public and private sectors because of Covid-19.

Sellers Are Optimistic

Sellers in the luxury segment seem unfazed in March, as new listings during the month rose 8.5 percent for Sarasota single family residences priced from $1million and up. This gain is in sharp contrast with the 11.4 percent decline overall in new listings for March.

Despite this general decline, there are early indications that the market is starting to shake off the initial shock from Covid-19. In late April, market observers noted a rebound in the number of prospective residential buyers visiting sales-listed properties either in person or virtually. In some instances, too, residences were sold without the buyers even stepping into a realtor’s office, with deals set remotely.

Hopes for a quick market turnaround from the pandemic’s difficulties can also be gleaned from an apparent pickup in buying demand in April. One recent report indicates that pending sales in the Sarasota residential market during the first two weeks of the month were up 69 percent. This pickup is rather remarkable, considering that the Sarasota market’s pending sales in March showed a sharp drop of 32.5 percent.

Market Drivers Firmly in Place

The April surge in pending sales could be attributed partly to record-low mortgage rates. As of the first week of May, the 30-year, fixed-rate loan of the Mortgage Bankers Association was pegged at 3.45 percent. In mid-April, Freddie Mac saw the rate slipping to 3.31 percent, which is “practically free money,” according to one loan broker.

Despite the adversities of Covid-19, Sarasota also hasn’t lost its luster as a destination for home buyers. Some market observers even mused that Sarasota is the best place to be quarantined.

It is also significant to note that measured steps are being taken as Sarasota starts to reopen its businesses and public places. The new norm of social distancing, for example, is being strictly enforced in shopping malls, beaches, and parks. Phased activation is also set for sports facilities like tennis and pickleball courts.

On healthcare, Sarasota enjoys high-quality medical services from the award-winning Sarasota Memorial Hospital (SMH). Notably, SMH has recently set up telemedicine across all levels of its healthcare services, thereby helping the communities it serve to cope with all the rigors of the Covid-19 pandemic.