Cheryl Loeffler is doing her darnedest to answer an interviewer's questions about the downtown real estate market, but every other sentence is interrupted by the incessant ring of her cell phone.

More clients desperately seeking downtown real estate in Sarasota.

Loeffler, co-founder of Premier Estates Advisors of Prudential Palms Realty, is one of Sarasota's top-selling real estate agents. Last year she sold nearly $70 million worth of property. This year, who knows? She says she's been especially busy during the past six months. And no wonder-she and her business partner, Richard Nicolosi, are spending most of their waking hours finding residences for clients who will pay pretty much anything to live downtown.

"Last year was the biggest year I've ever had in real estate," says Loeffler. "And almost half of the sales were in downtown Sarasota. We've been taking 20 reservations a month on downtown condos priced between $500,000 and up into the millions."

Loeffler and Nicolosi aren't the only real estate agents inundated with demands for downtown real estate. In just five years, downtown Sarasota has been transformed from sleepy and slow-paced to chic and urban. Suddenly, downtown is the place to live. To keep up with frenetic demand, more than 3,000 new residential units are in various stages of production. Construction cranes dominate the skyline, dust and debris fly from construction sites and detours have turned downtown roads into an exasperating maze.

"I haven't slept in a year," jokes Matt Orr of Michael Saunders & Company. "People are insane! They're making on-the-spot decisions. They'll pretty much do anything to live downtown. The problem is, there's nothing on the market." (Orr is not exactly complaining, since he made more money in one month in 2005 than he did in all of 2004.)

Just who are all these folks clambering to buy downtown? The buzz on the street is the "I" word: investors.

According to Nicolosi and others in the industry, investors make up about 35 percent of downtown residential sales. That's high for normal residential sales but low in contrast with other metropolitan markets in Florida, such as Miami and Fort Lauderdale, Nicolosi says, where investor levels average around 70 percent or higher.

Nine months ago, Nicolosi says, it wouldn't have been unusual for an investor to buy a yet-to-be-built condo for $400,000 and reassign it three months later to another investor for $500,000. By the third time around, the buyer can shell out as much as $700,000 and up for the privilege of a downtown address.

This practice is called assigning, or flipping, and it occurs before the building is finished and any closings take place. For example, if a buyer puts a deposit down on a $100,000 condo, he can tell a friend he'll "assign" it to him for a $10,000 fee. The developer usually takes 1.5 percent of this fee. This can happen minutes after the original buyer puts money down. Not a bad way to make a few bucks in a day.

Not all downtown projects have bought into that practice. "We tried to weed out heavy investors," says Diane Skelly of Tivoli Realty, the sales force behind Rivo at Ringling, a sleek new condo project under construction at Ringling Boulevard and Osprey Avenue that's slated to open in September 2006. "In order to buy at Rivo, you have to take ownership; you can sell it after closing, but we don't condone flipping."

Skelly says most of Rivo's 106 units (which originally ranged in price from $370,000 to $1.7 million) sold within nine months of marketing the project, mostly to locals from Longboat and Siesta keys. Gary Johnson, sales and project manager, estimates that one-third or fewer of the original buyers will turn their units over after closing. But even that figure is an approximation. "It's hard to say who a speculator is," says Johnson. "They don't come in with the word 'investor' written on them."

Chris Brown, developer of 1350 Main, a $55 million, 17-story project under construction at Main Street and Palm Avenue, says that while speculation is a viable part of any real estate market, the word on the street about investor participation in new downtown real estate is exaggerated. That said, the 134 condos in his project sold in just a few hours, and rumor has it that more than 70 percent were purchased by serious speculators.

Not true, he says-but then he muses, "How do you tell who an investor is? The people who bought in some of the more affordable buildings downtown are single moms, other realtors, and younger people who wanted to live downtown and realized the value of what they were buying. Downtown has become a very acceptable market for investors. But I don't want to dwell on the word 'investor.' If you think about it, anyone who buys real estate is an investor."

Still, Brown admits that while 1350 did not allow assigning, he has no sure way of knowing how many buyers will flip on closing. He predicts that no more than 25 percent will close and immediately sell. "The rest," he says, "will buy and rent or buy and live there."

Gil Alvarez, the developer of sold-out Burns Court Villas, an enclave of 23 multi-story villas under construction in Burns Court, thinks the percentage of speculators may be higher. He discourages flippers by prohibiting assigning because he says it hurts the project, and ultimately the community. "Do you really want to live in a building where you don't know your neighbors?" he asks.

Flippers don't always have the money to close; they're just holding onto paper, Alvarez says. If they can't get someone to buy before closing, the developer takes control of the product and keeps the deposit money, "but then he has to sell the unit again. It's like playing hot potato. When the last flipper can't sell, the building is minimally occupied. It makes the market too volatile." As for not being able to distinguish flippers from future residents, "You can more or less tell if they're going to hold on to it," Alvarez says. "You ask them, they'll tell you."

Beth Lancaster, a real estate agent with Sarasota Select Properties, sales liaison for Burns Court Villas, says buyers are a mix of professional and retired couples, ranging in age from 35 to 75. "Sixty percent of our buyers will be full-time residents. The remainder are part-time residents in vacation and second homes," she says.

Most realtors say the buyers-in contrast to investors-fit a certain profile.

"The preponderance are baby boomers who are either establishing retirement homes or their first pied-à-terre in this market," says Nicolosi. "They have the mindset and the financial wherewithal to accomplish their beginning transition to the Florida lifestyle."

Orr agrees. There will be 73 million baby boomers retiring in 2011, he says, and they're headed to places where they can continue to be mentally and physically active. In his opinion, Sarasota fits the bill. "They can be active here, with the beach, golf and our cultural life," he says.

Longboat Key and Siesta Key residents are also moving inland to be nearer to nightlife and cultural amenities. Out-of-state buyers are primarily coming from New Jersey, Massachusetts and Pennsylvania, as well from Midwest states like Ohio and Illinois. Florida's lack of an income tax is a major draw for baby boomers from these states. Nicolosi spells it out: "When these high net-worth executives retire, they experience a liquidity event-a lump sum of money. They don't want that cash to go to taxes. If they plan ahead and establish residency in Florida, they save a load of money."

But why Sarasota? And why downtown?

"This city has been blessed by nature in terms of its intrinsic beauty," says Nicolosi. "Sarasota's developers and visionaries have built a city with good urban bones that's also a major cultural center."

"We've got the best downtown in Florida," says Orr. "Everything's accessible-the waterfront, the restaurants, all the theaters. And Whole Foods has expanded this concept of an accessible lifestyle-everything within walking distance. Also, the empty nesters are rediscovering themselves; they want to become involved in their community, and the arts are a huge part of that lifestyle."

Most local real estate agents staunchly deny any danger of a downtown property bubble-or bust. It's a function of supply and demand, they say.

Florida is experiencing an in-migration of approximately 1,000 people a day. Compared with major cities around the nation, the Sarasota-Manatee area is still affordable. Nicolosi feels that a good percentage of this demographic wave will continue to wash onto our shores as long as unemployment remains low (now around 3.5 percent) and job creation remains high (fluctuating between 7 percent to 10 percent, which is superior to most comparable cities in the state and the nation).

But when it comes to the most desirable areas of our desirable area-downtown and the keys-space is limited. There's only so much real estate to go around. There's a limit to how much new construction can go up.

So, for the time being, anyway, as long as everyone wants to live downtown, well.

The sky's the limit.

Condomania: 2000-2005

Completed projects: 788

Under construction: 659

Approved but not yet under construction: 493

Planned, but not yet approved: 800

(ESTIMATE: City of Sarasota planning and redevelopment department. As of Aug. 1, 2005.)