Don't compare Island real estate to mainland
A report last week from the Florida Association of Realtors that the average sale price of a home in the Sarasota-Bradenton area fell 17 percent from December 2005 to December 2006 shouldn't be used as a comparison for Anna Maria Island, local real estate agents say.
The FAR reported that the median price for a home in the area in December 2006 was $284,700 as compared with $344,400 for December 2005. For the same 12-month period, the FAR said sales in the Sarasota-Bradenton area only declined by 7 percent.
But don't think those numbers are indicative of the Island real estate market.
"That figure doesn't apply to Anna Maria Island," said Mike Norman of Mike Norman Real Estate in Holmes Beach.
Agreed, indicated Barry Gould of Island Vacation Properties. "The Island real estate market has always been different from the mainland."
While Gould conceded that Islandwide sales in November and December of 2006 were down from the previous year, he believes the market has hit bottom.
"January activity is picking up and it's as good as December," he said.
Gould was also encouraged by the fact that sellers are now lowering prices to encourage buyers. He noted that the difference between the asking price and selling price of properties that sold in December 2006 was 10 percent, compared with a 2.8 percent difference in December 2005. "It's encouraging that buyers are getting good prices."
Gould discounted any drop in prices compared with the mainland.
From 2003 to 2005, Island real estate values were increasing 30 to 40 percent annually. Now, a 17 percent drop in the average sale price has to be compared with what prices were in 2003, he said.
"We're still way ahead of just a few years ago, so I believe we are back on track for normal appreciation."
Properties are now "reasonably priced and more consistent with the reality of property values," he added.
February should be a good month for Island real estate sales as more winter visitors arrive and find values in the market.
Frank Davis of Island Real Estate in Holmes Beach agreed. "You just can't compare the Island with the mainland. It's not the same," he said.
In fact, his office has seen more activity the past two weeks than the previous two months, thanks to a recent article in "Life" magazine announcing Anna Maria Island as one of the best beaches in America.
"It's really picked up. I'm excited about the season. I think if we check in mid-March, we'll have a better idea of how sales are going for the season."
Norman said that sales should pick up by late February, but in his opinion, Island real estate is now "generally over-priced by about 25 percent."
In other words, if sellers would consider lowering their asking price and be willing to negotiate with a buyer, sales should really jump. Right now, however, the Island real estate market is slow.
More and more investors are turning their properties into rentals, he noted.
The Island needs a good winter season with a lot of visitors, particularly those with an eye to buying real estate.
Norman said a good barometer of the industry will be how well sales have gone in February and how many rental units are occupied that month compared with how many are available.
"I think sales will be back to normal. I really expect a very good winter season," predicted Gould.
Is Anna Maria real estate over-priced?
A canalfront home on the Island recently sold for $489,000 after the owner dropped the asking price considerably.
A real estate agent who asked to remain anonymous and was involved in the sale said that once the price dropped, the seller had nearly 50 offers in just a week. The property was not posted with the area multiple listing service.
By comparison, GSR Development LLC plans to put its canalfront home at 403 S. Bay Blvd. in Anna Maria on the market with a list price $895,000.
"You be the judge," said the agent.
"If it sells, it's not over-priced. If it doesn't sell, then it's over-priced. So, if your property isn't selling, you might want to think about dropping the price," the agent concluded.