Mid-year check-in on real estate trends
Real estate enters slow season with high values
As the season winds down and the summer real estate quiet begins, brokers are saying that Gasparilla Island is getting back to a pre-COVID market, albeit with prices higher, and more uncertainty. In the five-year period from before COVID to today’s market, real estate prices have essentially doubled, which is unprecedented.
“It seems we are coming back into a more traditional market where the inventory is up and the demand slowing down for the summer months,” said Angela Steffan, broker with Gulf to Bay Sotheby’s International Realty.
The Days on Market for 2023 were below 50, and remain in that range for 2024 so far. Just before COVID in 2019, houses were on the market for an average of 102 days. By 2022, that had gone to an average of 28 days on the market, with a far fewer number of houses on the market, due to Hurricane Ian, and a jump in the average close price from $1.9 million to over $4 million. The market essentially had to level off from unprecedented increases.
Managing Broker Karen Danner, also of Sotheby’s, has been crunching stats to get a sense of the market as we go into summer. “This season’s market is probably most comparative to 2019, where we had relatively high inventory, but the price point now is much higher”
In 2023, there were a few major sales, including a property listed for $18,695,100. This year, the majority of properties sold were under $4 million, which seems to be a threshold number.
Over the bid up in island prices, the rise was felt in different places on the island, and it enabled a number of new parties to come into the market.
“Due to increased property values, we often heard sellers say ‘I’d be crazy not sell at these prices’,” said Steffan. On the buyer side, there is still a considerable amount of shuffling about within the island.
“I would say about half of the buyers are looking to purchase in Boca Grande for the first time with retirement in mind, and about half of the sales are current Boca Grande owners sizing up or sizing down,” said Steffan.
The Hurricane not only upset the number of available houses, but it reduced the feeder pipeline for customers. Rentals not yet back on the market have hurt sales efforts, as they are a source of prospective buyers. There are many rental properties still being repaired after hurricane Ian which affected the buyer pool this past season.
“The market is always affected by rentals,” said Steffan. “Buyers are often renters that convert to buyers.”
What has fed the market recently, however, has been the return of destination weddings. “Every time the Inn has a wedding, there are 20 to 50 new families exposed to this magical place they’ve never seen before,” said Steffan.
Other economic factors
There are also other economic factors that make buyers make a decision. Estate taxes are still a big issue. “No matter what’s going on in the local market, a significant number of our buyers are coming to Boca Grande because Florida does not have a state income tax,” Steffan said. “And we have a significant number of people who are either buying now for that reason, or talking about buying here in the next three to five years.”
This pause in the market comes at a time of the year when the market naturally slows down, and there are naturally fewer closings. “We are seeing and feeling a return to traditional market and timing,” said Kevin Hyde, of Parsley-Baldwin Real Estate.
The market is still seeing some excellent price points on properties, but not as many properties are moving, and in some cases, there is a significant difference from an original offering price. The market has not been this way for a long time. “Buyers are very interested,” said Hyde. “It is a wait and see. There are a lot of folks who are wanting to get involved.”
In advance of a big election, there is always uncertainty, Hyde says.
“The people that we deal with in Boca Grande are very good at doing something when there is a particular thing. This market isn’t doing a particular thing.” Right now, the softening market is hard to read, even for a sophisticated buyer like the one in Boca Grande.
“When markets are going down, people know what to do,” said Hyde. “When markets are going up, people know what to do.” A few large sales in 2023 made the average close price $4.6 million. The median sales price for 2023 was also its highest, at around $3.5 million, according to Sotheby’s figures.
“There have been some tremendous sales,” said Hyde. “You can’t compare that to other years, because there haven’t been those properties.” The island has seen mostly cash sales, but that is not just because of interest rates, and it is seen often off island, as people are retiring and selling their homes wherever they are from, Hyde said.
Off island, the newer developments have made existing houses in the same price range less desirable. Hyde said that a “brand new house with a warranty and all the bells and whistles” was an obvious choice for a buyer.”
Still some activity
“We are going into our normal sleep mode,” said Brian Corcoran of BRC Group, who looks for a little more activity through the Fourth of July holiday. The slowness isn’t just seasonal. Even if a buyer wants a property, the other property often needs to move first.
“We still have lookers,” said Corcoran. “But many people looking to buy a house have something to sell, still.” Currently, there are about 75 properties for sale on island, either condo, lot or house, and not including boat slips, of which there are 7 for sale on the island.
“That’s not some super high inventory,” said Corcoran. Instead, that is closer to a normal market.
Carol Stewart of Michael Saunders said that the slower market means more options for buyers. “Buyers are not having to chase down properties,” said Stewart. While some properties come off the market during the quiet months before a return to fall, brokers continue to list properties.
“There are buyers for the right properties,” said Stewart.
One issue that has helped sales at Boca Bay and Boca Grande Club are the built in amenities, as waiting lists for social club memberships are long. The off-island golf clubs Lemon Bay and Coral Creek give some help to newcomers, as their waiting lists are not as long.
News predictions of a tough hurricane season ahead have not helped, but there is nothing new about that, and the Gasparilla Island appeal remains.
“They know it’s going to be here,” said Stewart, “for all the reasons that we love it.”
