Sarasota Realtors Report Rebound in Sales and Prices

by Harold Bubil

Both the number of sales, and, more importantly for homeowners, the average selling price of homes sold in March rebounded from February’s level, according to a just-released report from the Sarasota Association of Realtors.

SAR members sold 800 properties in March – which was the most since September 2005, when the real estate boom started to fade.

March’s selling prices rose by double digits for both houses and condos from the previous month, and pending sales were at the highest level since the real estate boom ended in 2005.

Inventory dropped to 5,501 – less than a third of the available properties on the market during the bad years following the boom.

“Sarasota is clearly a recovering market,” said SAR President Michael Bruno. “Agents are very busy showing properties and writing contracts, and people are excited about our strong market rebound. Obviously, we haven’t seen numbers like these in several years. There is a buzz in the local market that’s reaching out to buyers across the nation and even internationally.”

Highlights of the report:

– House sales, at 580, were up 23 percent from the previous month, and 5 percent from March 2010, when the home-buyer tax credit encouraged 555 purchases.

– Condo sales, at 220, were up 10 percent from February, and 11 percent from March 2010.

– Median sales prices for both houses and condominiums increased to $159,250 for houses and $173,000 for condos, representing a 16 percent and a 26 percent jump, respectively.

– Distressed property sales fell to 43 percent of the total. In February, 47 percent of all sales were foreclosures or short sales.

– The inventory of for-sale houses fell to 6.0 months, down from 8.0 months in February. This could represent “the cusp of a seller’s market,” said the report. For condos, the remaining months of inventory dropped to 9.2 months from 10.4 months in February. Realtors consider a 6-month supplyof for-sale homes to be a balanced market between buyers and sellers.

“Price appreciation normally follows a declining inventory and increased competition among buyers,” explained Bruno. “I’m still hopeful that this trend, which has been evident now for several months, continues into the summer months. Last year, we saw strong activity in April, May and June, probably connected to the federal tax credit. But there is evidence the trend will repeat this year after seeing the March sales and pending sales figures.”

FL House Flippers Seek Inner-City Profits

WASHINGTON – April 18, 2011 – More investors are taking on the risk of flipping homes, despite falling home prices and sluggish real estate markets across the country. But investors say there are still profits to be made in the house flipping business.

Nearly 1 million homes were bought as investment properties in 2010, according to the National Association of Realtors®, and a record number of buyers purchasing properties with cash currently are flooding the market.

Flipping homes for profit is easier in rising markets, but not many markets are reporting increases in home prices, analysts say. In Washington, D.C., Justin Konz of RestorationCapital says his clients are going through four or five properties a month and are making gross profit margins of 35 percent or higher.

Where to find the deals

Flippers mostly are finding their homes through foreclosures auctions, REOs and short sales. They seek homes at rock-bottom prices that will have low fix-up costs, no more than about 5 percent or 10 percent of the purchase price.

In Florida, where investors are finding it more difficult to flip homes because of the drastic drop in prices and high inventories, flippers are targeting inner-city properties that are being sold at steep discounts. For example, some of houses are selling for $30,000 when they once sold for $200,000.

Perry Henderson, a real estate agent and investor in Austin, Texas, says the biggest opportunities in flipping are the “ugly” houses that have lingered on the market or “old houses that somebody’s grandma lived in for 40 years and didn’t do anything to. Now, she’s passed away and her family wants to sell quickly.”

Real estate investor Brian Fuller, who with partners buys and sells more than 200 properties a year in the San Diego area, says he’s drawn to the “biggest eyesore on the block.” He says they then “ turn it into the best-looking house there. We’re helping pull up values in the neighborhood.”

Source: “Vulture Investors Flipping Their Ways to Big Profits,” CNNMoney.com (April 13, 2011)

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