Construction slow to meet demand
By Josh Salman
It was on a vacation in Sarasota one year that Michael Moulton met real estate mogul Michael Saunders.
As she had with so many real estate transactions, Saunders quickly closed the deal, selling Moulton on a future here, joining her then-rapidly-growing organization.
Moulton and his wife moved to Sarasota (her hometown) in early 1982 and immediately started selling real estate with Michael Saunders & Co. — one of the region’s largest brokerages. Moulton now sells around $25 million to $30 million worth of residential real estate each year, which is consistent with the market before the crisis. He specializes in luxury and waterfront homes.
The real estate veteran answered some questions for the Herald-Tribune on the state of the market, what is driving the housing recovery and what he sees for the future.
Q: How would you assess Southwest Florida’s luxury real estate market? Where are we now and where do you see it going?
A: “I predict our luxury prices will continue to rise at a healthy pace, especially due to the lack of available waterfront property, and the huge population of baby boomers beginning to think seriously about retirement.
“Their desire to not live through many more winters and to find a place that will fulfill both a need for high quality of life and also opportunities to continue to be active both socially and professionally gives me confidence our market is well positioned to enjoy strong growth in the next few years.
“Our inventory is at a 10-year low, which in itself will continue to push prices higher. We are in some of the lowest interest rate borrowing cost times in history, with only moderate increases expected in the next few years. Many of my customers are not yet ready to retire but are taking advantage of current prices, knowing that they will only continue to rise.”
Q: Much has been made recently about the baby boomer population and the demographics’ impact on real estate. Who is buying luxury homes right now? What are you hearing from buyers as to “why here” and “why now?”
A: “The purchasing by baby boomers has a very large local impact in real estate sales. Baby boomers represent a reasonably large spread in ages coming to Sarasota. Many have vacationed here over the years before purchasing and in many cases their parents and relatives have lived here.
“My customers have intentionally chosen the Florida West Coast over the East Coast for many reasons, especially such considerations as our great value in comparison to our competitors like Jupiter and Boca Raton, and even Naples to our south, which many visit before making a Sarasota purchase. Certainly our rich cultural offerings, abundance of fine restaurants and shopping, and wide-ranging leisure activities add to the attraction.”
Q: Who holds the edge right now, buyers or sellers?
A: “A slight edge to the sellers, with the low inventory, but buyers are not going to pay unreasonably inflated prices based on past sold ‘comparables.’ The current ratio of list-to-sale price is very narrow, which indicates our regional Realtors are doing an excellent job of guiding our seller pricing strategy and buyer expectations.”
Q: How has the recent uptick in new construction affected the resale market? Are there enough resale listings to meet demand?
A: “New construction has definitely helped the low inventory situation, but in most cases the new construction is in large developments that are east of the interstate. The majority of my luxury buyers want to be closer to the waterfront of our area. We could definitely use more luxury inventory on or near the Gulf and bay, in great condition and requiring a minimum of alteration. There are plenty of buyers looking to buy now/move in now.”
“The new luxury condominium construction is still up to a year or more away from occupancy, so increasing the number of single-family and condo resale inventory is key to keeping prices from escalating too quickly. Many of my buyers who are making deposits on units in pre-construction projects would prefer to buy an existing residence and not go through the one- to two-year design-and-building process, but just haven’t been able to find an existing residence that meets their desirables.”
Q: How do you manage seller expectations today? What are some of the desires you hear from luxury sellers that are unrealistic?
A: “I have an expansive factfinding process that I use with every customer, whether buyer or seller. Taking time to explore as many possible questions and variables as possible that will guide me are critical to success. Determining a seller’s special needs and expectations allows me to research ‘comparables’ and unique market conditions prior to developing pricing strategy, timing and even needed repairs and preparations prior to listing.
“I coach my customers to be happy with an offer, regardless of how low it may seem to be to the list price. It can be very hard for sellers to understand that certain features of their home were designed for their personal desires and may not be those of the mainstream market, and it’s important not to take the criticism of their property personally.
“If we have reasonable parties on both sides of the transaction, we will get to a mutually agreed to price and a successfully closed transaction.”
Michael Moulton, a Realtor with Michael Saunders & Co., predicts that Southwest Florida luxury prices “will continue to rise at a healthy pace, especially due to the lack of available waterfront property.” HERALD-TRIBUNE ARCHIVE / 2012 / DAN WAGNER