Located on Florida's stunning Gulf Coast, Sarasota is a charming city with a lot to offer home buyers, sellers, and investors alike. Once the home of the Ringling Brothers Circus, Sarasota boasts timeless charm and rich cultural heritage, garnering a reputation as an exceptional place to call home. The coastal city also stands as a pinnacle of luxury living with its upscale amenities galore, including the Ringling Museum of Art, the stunning Van Wezel Performing Arts Center, and the Sarasota Opera House.
Its beautiful, white sandy beaches make for a stunning setting, enticing residents to partake in outdoor recreation. The Sarasota real estate market is also desirable, with upscale neighborhoods such as Lakewood Ranch and Arlington Park offering buyers a wide range of housing options.
However, the market is subject to fluctuations, calling for cautious buying. From changes in property prices to shifts in demand, this blog will provide a detailed look at the latest trends in the Sarasota real estate market for 2023.
Home values are increasing
The Sarasota real estate market has experienced an overall increase in home values in recent years, and this trend is expected to continue in 2023. The median sales price in June was $510,000, an increase from May. The allure of this vibrant coastal community, with its pristine beaches, rich cultural heritage, and thriving arts scene, contributes to high demand for homes, escalating property prices.
The job market is also healthy and stable, with several sectors, including tourism, providing a strong base for growth. A favorable business environment has attracted investors and professionals, further fueling the demand for housing. The limited supply of housing units is unable to match the growing demand, thus creating a surge in property prices.
Rising interest rates
The Federal Reserve announced in June 2023 its decision to pause raising interest rates, citing an improved economic performance indicated by moderate inflation rates. This brought a halt to the long streak of 10 consecutive hikes over the last year. Of equal importance was the popular opinion that more rate increments would be needed in the coming months to keep the economy in check.
At the end of July, the Federal Reserve raised interest rates again and also alluded to another hike in the upcoming months, citing the need to reach an inflation threshold of 2%. Rising interest rates have always presented challenges to all players in the real estate scene, with buyers' affordability being compromised and sellers' seeing a decrease in demand and prices. However, 2023 holds some promise; the rise in interest rates will likely be at a slow pace, and many experts believe that rates will decrease next year, providing much-needed relief for buyers.
Investing indicators are in favor of landlords
An investor's take on any real estate market focuses on rental yields as much as capital gains. With rising demand stemming from a growing population and a stable economy, Sarasota is poised to experience a steep surge in the rental market. A growing tourist base and the increasing popularity of the urban lifestyle are other factors expected to contribute to the high demand for the area’s rental units.
Recent market trends are indicative of how the situation will unfold in 2023. Sarasota median rent rates jumped by 4% from January to December 2022, eclipsing the national median increase. A staggering 42.5% increase was reported for the same period of the previous year, also eclipsing the national figure by a big margin. This is good news for investors seeking rental properties in Sarasota.
Positive net population migration
Florida's economy continues to experience growth, with Sarasota being one of the top performers. The city attracts individuals and families from across the country seeking a high quality of life and opportunities in various fields. Florida's favorable tax environment also attracts individuals and investors seeking to make the most of their incomes and investments. The Sunshine State has no state income tax, compared to the 3%-9% income tax rate in other states, making it a big draw for investors and new residents. Sarasota's recent population rates are estimated to be around 57,376, a 2,536 increase from 2020. This trend is expected to continue, further driving demand and property values.
Sarasota County housing market trends 2023
Like its namesake city, Sarasota County is experiencing growth, with population increasing from 462,286 in 2020 to 434,005 in 2022. Sarasota County’s economy is a top performer. The real estate market reflects this, with homes sold at a median price of $448,750. The growth is expected to continue in 2023, creating a viable market for investors seeking a high return on investment and buyers looking to preserve wealth.
Sarasota foreclosure statistics 2023
Florida was at the wrong end of foreclosures in the first quarter of 2023, ranking third in states with the highest foreclosure rates at 4,724 foreclosures. Sarasota saw two completed foreclosures in June 2023, with just one in May.
Sarasota County has also witnessed a steady recovery from the COVID-19 pandemic’s mandated shutdowns, resulting in a reduction in foreclosure activity despite increasing interest rates. The economy's rebound increased job opportunities and remuneration, providing homeowners with the means to meet their mortgage obligations.
Should you invest?
Sarasota is a desirable investment destination. The robust health of the real estate market indicates that there will be high returns on housing purchases. Buyers and investors are advised to take advantage of the current real estate market.
Are you looking to invest in Sarasota real estate?
If you are a buyer looking to make Sarasota your next home or an investor hoping to diversify your portfolio, set up a consultation with the experts at Greco Real Estate. As a leading real estate brokerage in Sarasota, the team’s experienced agents are qualified to help you make the right investment choices. Contact Greco Real Estate today to find homes for sale in Sarasota.