BY SUSAN HANAFEE – Excuse us for stating the obvious: The housing market in Boca Grande and environs is hotter than Florida asphalt in September and shows no signs of cooling off.
The situation prompted Kevin Hyde of Parsley-Baldwin Real Estate, a district vice president for Florida Realtors, to post a humorous comment on Facebook recently that compared the current real estate market to musical chairs.
“You’ve got three chairs, 40 people playing, but now the chairs are on fire, and you’re being chased around the room by a scary clown.”
Hyde observed, “I posted that observation by Phillis Choy, a West Palm Beach Realtor, in gest. But it is a funny description of what is going on here.”
The pandemic and the opportunity to work from home, a warmer climate and unique island lifestyle, coupled with higher taxes in some northern states appear to be the main contributors to what Boca Grande Realtors are describing as the “perfect storm” for people wanting to sell their property.
Consider the homeowner on Waterways Avenue whose residence had been on the market for an extended period at a price of $4.3 million. Within one week in January there were four offers on the home with canal frontage. The highest bid was $4.5 million, which ended up being the selling price.
“A sale at 105 percent of the asking price is definitely not normal, but we are seeing more bidding wars,” says Brian Corcoran of The BRC Group, who sold that same property in 2010 for $1.6 million. He points out that the individual who bought the property 11 years ago spent $1 million remodeling it.
Another property, this one on Tarpon Avenue, was purchased for $1.4 million in 2016 and painstakingly remodeled over two-plus years before it sold in December for just south of $4 million. A similar offer was waiting in the wings if that one fell through, says Carol Stewart of Michael Saunders & Co.
Stewart says she encourages potential buyers who miss out in a bidding war to make a back-up offer. “Sometimes sales fall apart, and it’s better to be in line than to have to deal with multiple offers again,” she explains.
Even entry-level condos have been selling well, with a rare three-bedroom residence at the Boca Grande North complex going for $1.1 million. The average price today for two-bedroom units there is $650,000.
Brian Corcoran, whose firm Boca Grande Vacations manages rentals and sales at Boca Grande North, points out that in 2020, 19 units and seven boat slips in the complex were sold. “That was unprecedented,” he said. There are currently no units for sale there.
Donna Moore of Gulf to Bay/Sotheby’s said there is no doubt that the real estate market in Boca Grande benefitted from the COVID surge: “Imagine living in a high-rise in New York City and trying to share an elevator with 10 other people that aren’t your best friends during a pandemic. Here, people could go outside to the beach and be on the water. It was especially appealing during the winter.”
People in their fifties are also now investing in what for many are second homes, Moore says. In the past, the buyer demographic would be individuals in their sixties and seventies.
“My hope is that the new, younger people coming here have the same attitude that many others in the past have had – the desire to get involved in organizations, volunteer and become a real part of the island,” she says.
Several local real estate offices provide fact sheets on recent sales. Gulf Coast International Properties’ recent listing sheet indicates that since the first of the year 15 properties have sold for the listing amount or above and 41 have been purchased for close to the asking price. Generally, sales have averaged 98 percent of the asking price.
This year to date (as of April 13), buyers have shelled out $126 million for island properties, with $88.7 million in sales pending.
“This is not a bubble,” says Bob Melvin of Gulf Coast International Properties. “How many places on the planet can people Uber their jet south and be at their beach house in 10 minutes with a world-class golf course like Coral Creek close by. Virtually nowhere.
“People are leaving places like Palm Beach and Naples and coming here. Because of the nature of Boca Grande, you can make a pretty strong argument that housing prices will double in the future,” he adds.
Jim Benson, who has Parsley Baldwin, Paradise Exclusive off-island and Benham Contracting, agrees with Melvin. “You don’t even need to be reasonable with your prices if you are in a popular part of the island,” he adds. “There is a buyer out there looking.
“As long as Florida continues on its course of being business friendly and having great tax incentives for living here, the real estate business will be strong,” he adds.
According to the latest data available from Florida Realtors, the state’s population grew by 241,256 people between July 1, 2019 and July 1, 2020 or 660 people a day. Pre-pandemic estimates from other sources range from 750 to as high as 2,206 people moving to Florida daily.
Along with home sales, rental properties are also in high demand and seeing rates rise. “More people are telling us they may be interested in putting their homes in the rental pool because they can negotiate a better price,” Donna Moore says.
What is great for sellers is not so good for prospective buyers. Not only in Boca Grande, but across the state, homes for sale are growing scarcer. Florida Realtors reports that the statewide inventory of active single-family home listings, which the association has tracked since 2008, is at an all-time low.
As of late last week, there were 17 homes including condos for sale – and not pending – on Gasparilla Island.
Florida Realtors also suggests that the small but increasing number of homeowners who have been thinking about selling their home and buying another are starting to get turned off by the lack of inventory and rising prices.
Mark Spurgeon of Boca Grande Real Estate, whose company has offices at Sea Oats and Boca Bay, says that property in those two complexes comes on the market and doesn’t even make it to the multiple listings. “But then the scary thing for people is that if they do decide to sell, where will they go?”
Jim Benson also points out that people struggle with the idea of leaving the area. “Off-island inventory is so dried up and picked over, that I would say that almost the majority of our transactions are land. Unless you have another property that you own, there is not a lot of choice.”
Creating more challenges for those who are thinking about building are the increased costs of materials and a short supply of trained construction workers.
Spurgeon cites a builder friend in Charlotte County who says that lumber for his model home packages has gone up fourfold. “We have also lost 46 percent of our construction labor force since the mid-2000s and some predict that it won’t recover for another ten years.”
Like several others, Spurgeon, who has been in the real estate business in Boca Grande for more than 40 years, sees the current hot market continuing. “We have a quaint village and are out of the way. With greater connectivity, people are making the choice to live someplace like this.”