A Less Than Sunny Outlook on the Sarasota Housing Market

When it comes to discussing the future of the real estate market in Manatee and Sarasota counties, just call Kerry Kirschner the Grinch who stole Christmas.

“A prolonged weakness in house prices will no longer allow consumers to extract cash or liquidity from their home,” said Kirschner, the executive director of The Argus Foundation, a Sarasota-based liaison between business and government.

“If homeowners face [Florida mortgage refinancing], increased property taxes and insurance, without consideration of maintenance expense, the homeowner mortgage financial obligation triangle will rapidly absorb household liquidity for many people in our area.”

Construction of new homes is expected to decrease by 21 percent nationally in 2007, Kirschner said at the foundation’s monthly “Meet the Minds” membership luncheon Wednesday at the Sara Bay Country Club.

“Locally, we are further impacted by a large inventory overhang above new construction and resales that will not only limit further new construction, but will probably cause many builders to abandon our market until inventory levels come back in line with supply and demand,” Kirschner said.

Local housing market forecast

Despite such a grim forecast for the future of the area’s real estate market, Dale Friedley of the Manatee County Property Appraiser’s Office, said the Sunshine State seems to have escaped fears of possible housing depreciation.

In spite of the slowdown in the real estate market from super-heated levels of 2005, Friedley has consistently said that the annual appreciation for 2006 will be between 12 and 14 percent, comparable to levels in 2003.

But with a growing number of residents concerned about how a possible slowdown in the Florida home mortgage market could hit their bottom lines, Sarasota County Property Appraiser Jim Todora joked at Wednesday’s luncheon that he has had his share of “fan mail” over the past year.

“A person had wrote, ‘What are you doing down there? Are you out of your cotton-picking mind? Are you crazy? Don’t you know what is happening in the real estate market?’ ” Todora said. “I really enjoyed a homeowner who wrote to me lately. She said, ‘At this point you’ve probably been called every name in the book, so I thought I would skip that part and get to the important stuff.’ ”

But before the community begins to fret about a declining Florida housing market, Todora said people must appreciate the success the area has achieved during the past years.

“In 2005, we saw 55,000 parcels of real estate change hands. That’s an astronomical amount considering we have about 260,000 parcels of real property,” Todora said. “The total selling price of those 55,000 parcels is $11.2 billion, for an average of $204,300 per parcel. That was a 42 percent increase over the average selling price of a parcel just the year before.”

In addition, Sarasota County added more than 5,400 new homes and 1,600 new condominiums in 2005. There IS still demand for Florida mortgages in the area.

“Over $2 billion of new construction was added to that tax roll,” Todora said. “If you remember not too many years ago, we broke the $500 million mark and I really thought that was something.”