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Date of Issue: March 09, 2006

Island real estate market could be crawling

The Anna Maria Island real estate market has hit the skids, according to some local real estate sales agents, while others say it's just in a period of "adjustment."

Prices have just about reached their maximum for this current cycle, while buyers are sitting on the sidelines waiting for prices to drop, said one local real estate agent who asked not to be identified.

"I don't want to be the one to rain on anyone's parade, but the market right now is awful," the agent said.

For example, he said, in the past five months, only eight condominiums in the $400,000 to $1 million price range have closed, while 252 condos remain for sale.

Single-family home sales haven't fared much better. Of 271 current Island homes listed for sale, there are only 15 pending purchases.

"There's just no interest from buyers right now," he added. Many current listings are over-priced and buyers are not dropping their asking price.

That's not to say, however, that real estate won't rebound on the Island.

"The market has peaked, but remember that values have gone up more than 100 percent, even higher, the past five years. Now prices are leveling off and I see a buyer's market coming," he predicted. Sellers who have lowered their price and are willing to negotiate have had "action" on their properties.

In fact, the agent added, "I tell my clients that if you don't have to sell, don't put it on the market. If you do sell, be prepared to lower your price. But make no mistake, business is slow on the Island."

Another indicator, there were no sales transactions on the Island to report this week.

Indeed, a press release from a national mortgage brokerage firm with local ties said that real estate values in the Manatee/Sarasota area would decline by 10 to 15 percent through the end of 2006, and suggested now would be a good time to "cash out" with a refinance or line of credit.

"I don't know if 10 to 15 percent is accurate," the agent said, "but I do know that values are dropping and sales are real slow."

If you think Island real estate sales are down, however, just look south. In Sarasota, there are more than 9,000 current listings for condominiums and single-family homes.

"It's totally dead down there," the agent said. "Anna Maria Island will come back. It could be in the next few months or not until next year. Will it be a 10 percent drop in prices? I don't know," the agent said.

And not every "for sale" sign in the Island market is gathering cobwebs.

"The high-end market and the low-end market have seen a lot of activity," the agent noted. "It's the mid-range of homes that aren't generating a lot of interest."

A recent listing for a Gulffront home for $4.5 million drew a number of offers and a contract was signed within a few weeks of the offering.

But the slowdown will turn around, predicted Alan Galletto of Island Real Estate in Holmes Beach.

"We're just getting back to a normal cycle," he said.

"It's the cycle we were in seven or eight years ago before the boom struck. The past five years have been a sellers' market, and prices went up 30 to 35 percent or more every year. Now, we're seeing prices go down," Galetto noted.

"The Island is turning toward a buyer's market, but the present buyers are looking at high-end properties or for bargains," said Galetto. Once prices stabilize, the Island market will return to a "normal" cycle of between 8 and 10 percent annual growth in values, he predicted.

Another agent who also asked not to be identified said a few agents are giving their clients - buyers and sellers - the wrong information.

"People are sugarcoating the market," the agent said.  "The market is dead right now. People shouldn't go by what's happened the past three years. I tell my clients the truth, that there's not a lot of demand right now, and they're probably not going to get what they expect, especially if it's a mid-range property. But if they are interested in dropping the price, that might generate some activity."

He added that no one wants to be the last person to pay too much for a property. "Buyers are out there, but they're sitting on the sidelines and waiting."

Fact is, said Gail Tuteweiler of Wedebrock Real Estate, "the smart buyers should make their move now."

She agreed the market has been flooded with properties for sale, but rejected any notion that Island property values will decline significantly.

"This is the beach. People always want the beach," she said. "Prices aren't going to drop," but they might just level off. "So, now is the time to buy because sellers are becoming open to negotiating," she added.

Too many people have read stories in mainland newspapers about the drop in home sales and prices, she said.

"That's the mainland. The Island is not the mainland. Prices here aren't going down, just expectations. A smart buyer will jump in now and make an offer," concluded Tuteweiler.

While some agents are optimistic, the latest figures from the Anna Maria Island Property Sales Report would indicate asking prices have fallen, if only slightly, the past few months.

The AMIPSR said the average listing price of a single-family residence currently on the market in January was $1.l15 million, down just $17,000 or 1.5 percent from the $1.132 million average price reported at the same time last year.

Condominium prices also fell, from an average listing price of $819,000 in January 2005 to a $799,500 average in January 2006, a 2.5 percent drop.

The average price of a duplex, however, increased about 6 percent, climbing from a $1 million average in January 2005 to a reported $1.06 million average for January 2006.