Make your Move
The tug at your heartstrings is palpable. A few days in Sarasota and you’re longing for a second home—a place to unwind, to retire, perhaps an idyllic getaway where beautiful holidays with the children and grandchildren will be shared. Your fantasies compel you to stop and read the listings on every window at every real estate office you can find. Can you pull this off? Is it wise in this economy? Dare you try?
The answer to all three questions is “yes,” say local realtors. “We have a bit of a perfect storm brewing out there,” says Joel Schemmel, realtor with Signature Sotheby’s International Realty. “There’s a trend toward real estate as a reasonable place to put money again—especially for retirees or future retirees actively looking for a second home lifestyle.” Sarasota has several key factors, he says: a market that still favors the buyer with low interest rates, tax advantages and reasonably good inventories.
Helen Sosso, CEO of Prudential Palms Realty and Prudential Lakewood Ranch, concurs. “Low mortgage money and low prices are driving the uptick in second home purchases,” she says. “Prices have fallen drastically, in some cases to 50 percent of what they were five years ago. We’re seeing a lot of baby boomers wanting to take advantage of the market now—even if they’re not ready to retire.”
Many boomers can afford to buy into the retirement home dream now by renting their vacation home for all or part of the year. Interest rates and housing costs are so low right now that rental fees can actually cover the mortgage. “That’s new in this economy: You could never get enough rent to do that before,” Sosso reports.
Indeed, the second home market is faring better than the market for primary homes. “The folks with the discretionary income available know that they may never be able to buy luxury waterfront properties at this price again,” notes Gigi Silverberg, realtor with Signature Sotheby’s. What’s more, she says second home buyers are paying cash in ever-increasing numbers. Confidence is back; the wait-and-see period is over. Brokers are optimistic that the market has corrected itself.
Another consideration for second home buyers is the recent 10 percent non-homestead tax cap, according to Kathy Hoonhout, broker agent with Coldwell Banker Residential Real Estate. “Our state has recognized how valuable our second home owners are, and by capping the tax rate, they’ve taken a lot of the uncertainty out of the buying decision,” she says. Before January 2009, taxes on non-homesteaders were tied to market value. During the recent boom years, they were sometimes rising by as much as 25 to 30 percent annually. “That was daunting,” Hoonhout recalls.
Unlike their predecessors in previous generations, today’s second home buyers are choosing not to move to Sarasota cold turkey. They are transitioning. “The majority of people buying in the luxury market will generally maintain two homes for a long period of time,” Hoonhout says. “We’ve seen a big change over the last five or six years, in that they’re keeping their primary residence, but extending their stays in Sarasota. Instead of several months, they stay throughout season, certainly through May—many through June, some returning two or three times during the summer.” Others may fly in and out all through the year.
The Sarasota lifestyle is irresistible to retirees (and future retirees) because today’s retirees are much more active than ever before. “I never hear the word retirement; I hear change in lifestyle,” Sotheby’s Silverberg says. “They have golf, tennis and social engagements every day. They can come back to Sarasota more often and stay longer because they’ve figured out ways to work from home offices here. Years ago people thought Florida was a place to go and die. Now it’s a place to enhance the quality of your life.”
Sosso of Prudential Palms agrees. “Retirees today don’t see themselves as old; they see themselves as retired and young,” she says.
Sosso is keeping tabs on another trend that she believes is influencing baby boomers’ interest in Sarasota. “We are seeing people who are approaching retirement age look for a second home as well as a facility for their parents, whether an Alzheimer facility or assisted living facility. In some other parts of the country, buyers look for schools for their children; here, they’re planning to be near assisted living for their parents,” Sosso says.
The convenience of Sarasota-Bradenton airport (and our proximity to Tampa) positively impacts the second home market—not just for those still working and living in other parts of the country, but for Canadian and European buyers as well. Both Western and Eastern Europeans are now exploring options along the Gulf Coast; not too long ago their destination point was the east coast of Florida.
Realtors say it’s vital that our city and county leaders maintain that airport accessibility—a real selling point when potential buyers compare Sarasota to other Florida cities. “Our Toronto clients get to Sarasota quicker than anywhere else, and they are floored when they find they can get from the airport to Longboat Key in less than 20 minutes. They’re accustomed to driving for hours when they get off a plane,” Hoonhout says.
Sarasota’s second home buyers aren’t just getting younger; they’re getting smarter. “The buyer is much more studied and more analytical now. They’re comparative buyers—and Sarasota is getting compared to other destination locations, particularly on the Gulf Coast,” says Schemmel of Signature Sotheby’s. Potential buyers know from their research that Sarasota is the cultural capital of Florida, with everything from theater to symphony, ballet, opera and a star-studded film festival.
They know that we have incredible white sand beaches, seven barrier islands (each with its own personality) and lots of waterfront property. But what they can’t possibly imagine before they arrive is the variety of Florida lifestyles we offer—laid-back beaches surrounded by natural foliage on Siesta Key, manicured golf courses and beachfront condos on Longboat, a vibrant downtown and pristine golf communities south and east of downtown.
Schemmel’s portfolio has something for everyone, from a spectacular 4,500-square-foot custom contemporary by architect Guy Peterson on the Gulf of Mexico on Siesta Key ($2.65 million), to a two-story villa in Prestancia with soaring double-height living room ($375,000 for 3,200 square feet). The no-hassle villa is maintenance-free: Just hop off the plane and roll out your door onto TPC at Prestancia, a 36-hole tournament-quality golf course.
That dichotomy is what’s so intriguing about Sarasota. We have golf, beaches, boating and culture, but unlike most other Florida cities, we also have a bay. You can have it all at one fabulous Coldwell Banker listing at Water Club II, a seventh-floor condo with three bedrooms, 4 ½ baths and 3,700 square feet including terraces with sunset and sunrise views ($2.49 million). “One recent buyer told me there was nothing else on Longboat Key with grounds and resort amenities like the Water Club,” Hoonhout reports. “You enter a driveway that’s totally lush and manicured; behind that gate it’s total luxury—a private beach, 17,000-square-foot clubhouse with a grand ballroom, a Gulf-front pool and 24-hour concierge.”
While waterfront properties are No. 1 on homeowners’ wish lists, golf communities like Lakewood Ranch and University Park are a close second. But listings like Prudential Palms’ downtown Sarasota penthouse at Plaza at Five Points ($ 2.75 million for 5,637 total square feet including huge dramatic terraces) are within minutes of beaches and golf courses.
The diversity of options is responsible in large part for Sarasota’s appeal to buyers from abroad who relate to Sarasota’s small-town feel and big-city cultural attractions. A lot of Europeans like Sarasota because we offer a very European environment. “Our downtown doesn’t have big skyscrapers, which is a plus,” says Helen Sosso. “Main Street in Lakewood Ranch and St. Armands Circle have the smaller bistros and restaurants they prefer, and international buyers are always attracted to the arts.”
Feedback from European and Canadian clients indicates that the buzz about our city and surrounding communities was growing overseas even before September 2010, when U.S. News & World Report named Sarasota one of the 10 best places in the nation to buy a home for under $800 a month.
The magazine used the National Association of Realtors’ median home price data for 159 metropolitan areas as of the second quarter of 2010 to locate what it considered the 10 best cities where a home could be purchased for less than $200,000. Factoring in a 20 percent down payment and a 4.32 percent interest rate on a 30-year fixed mortgage, a $200,000 home would result in monthly payments under $800 for principal and interest alone.
The figure for the Sarasota area was $734—which for second home buyers is not just doable, it’s a deal. Though brokers agree that the sweet spot now in the vacation home market ranges from the high $200,000s to $500,000, they are seeing top-quality homes (usually villas and condos in golf communities) that are priced under $200,000. Believe it or not, a lot of investors are now busy buying property in that price range in Lakewood Ranch, one of the few remaining prestige communities where those who prefer spanking-new homes can find land.
But perhaps the most important trend in second homes is the desire for a lifestyle that suits the entire family. “Baby boomers and empty nesters want their future or current retirement home to also be a place where the family can get together away from the hustle and bustle of daily life,” Joel Schemmel says. “They want a lifestyle that will be intriguing to multi-generations, and we often have the whole family involved in the buying process to ensure everyone will take advantage of what the second home has to offer. “ Whether that’s golf, boating, the arts, tennis, beach (or all of the above), as long as there’s room for kids and grandkids, anything goes. n
Listed at $3.45 million by Joel Schemmel of Sotheby’s Signature International Realty, this Sanderling Club home has six bedrooms and five baths—room enough for several generations of vacationing family.
What Your Money Can Buy
$375,000: Dream Golf Villa
Joel Schemmel, realtor with Signature Sotheby’s International Realty, says a great place to buy a vacation home is Prestancia, a prestigious golf community just 15 minutes from the beach that boasts a 36-hole tournament-quality golf course. A two-story villa with soaring double-height living room is listed at $375,000 for 3,200 square feet. Contact: (941) 587-4894
$579,000: Country Club Deal
You can buy into the country club dream at the award-winning University Park Golf & Country Club with deals unheard of since 2003. This 3,084-square-foot split-plan custom home with three bedrooms and three baths has expansive outdoor entertaining area with pool, spa and stone deck. It is listed at $579,000 by Linda A. Page, realtor with Prudential Palms Realty. Contact: (941) 926-7000
$2.49 million: Beachside Luxury
This is both the ultimate vacation home and a great value at $2.49 million, says Kathy Hoonhout, broker-agent with Coldwell Banker Residential Real Estate. You get panoramic Gulf-to-bay views, elevation, square footage (3,700 feet, including terraces) and upgrades in this three-bedroom, 4 ½-bath condo at Water Club II, replete with clubhouse, concierge and every resort amenity. Contact: (941) 228-3945