A Look at Sarasota’s Real Estate Market: Insights for Buyers and Sellers in 2024

A Look at Sarasota’s Real Estate Market: Insights for Buyers and Sellers in 2024

Sarasota real estate draws international interest for the city’s white sand beaches, beautiful weather, and relaxed way of life. Its coastal location provides a comfortable year-round climate, and the downtown area features restaurants, art galleries, cultural attractions, and local history. As the market continues to change during the start of 2024, take advantage of these insights from your trusted Florida realtor in Tampa, Sarasota, and beyond.

9 Sarasota Real Estate Insights for 2024 From Your Realtor in Tampa

1. Peaking Home Prices

At the end of 2023, Sarasota real estate showed a home price increase of 140.5% over December 2022 prices. The city’s median sale price of $950,000 reflects the desirability of this Southwest Florida metro. Low inventory and high-interest rates have driven the pricing surge in Sarasota and elsewhere over the past few years.

Homeowners who decide to sell this year may see higher profits than expected, while buyers should plan to budget for the rising costs in the area. On the other hand, housing costs should stabilize in the coming months, with more modest annual increases of less than 2%. More properties are expected to enter the market in 2024, and many predict that the Federal Reserve will lower interest rates in the second or third quarter of the year.

2. Unbalanced Housing Supply

Sarasota has about a 3-month supply of available housing for sale, compared to a national average of approximately 2.1 months. Although the city’s inventory has opened up compared to the 2-week supply reported in 2022, the market isn’t truly balanced between buyers and sellers until the available housing supply reaches 6 months.

When this occurs, those on both sides of the transaction have more room to negotiate. In a balanced real estate market, buyers and sellers can more often reach a mutually beneficial outcome. About 475 new residential properties went on the market in December 2023 alone, a sign that sellers are starting to have more choices in 2024.

3. Many Multiple-Offer Homes

Although the real estate market has shown some signs of slowing in Sarasota, properties that show well still command multiple offers. While that’s good news for buyers, sellers can also breathe a bit easier as homes are starting to stay on the market longer. Waterfront homes, new builds, and fully renovated properties tend to get the most attention from buyers. Conversely, most people are avoiding homes that need major upgrades.

4. More Time on the Market

Speaking of longer market time, this metric increased by about 200% for single-family homes in Sarasota from 2022 to 2023. These properties now spend about 27 days on the market. Market time averages 28 days for Sarasota condos, an increase of around 250%.

5. Pending Price Decreases

Sarasota’s market could shift from the sellers to the buyers in 2024 for the first time in several years. The North Port, Sarasota, and Bradenton metro area was named the fourth most overpriced city for residential real estate in Florida and 17th in the entire nation. With properties selling at nearly 50% over value, the city could be due for a price correction in the coming months.

6. Slowing Relocation

In 2023, more new residents moved to Sarasota from other states than almost any other metro area. The city ranked fourth in the nation for incoming out-of-town residents. However, the relocation pace has started to slow, another factor that contributes to lower home prices. At the same time, buyers will experience higher inventory and lower levels of competition as a rising number of long-time Floridians move out of the Sunshine State.

7. Lower Mortgage Rates

As financial experts predict declining interest rates for the second quarter of 2024, more buyers will be able to afford to enter the market. This influx could help mitigate the downward price correction for sellers, contributing to a healthy balance in the Sarasota housing market.

Rates peaked late last year above 7% and have since settled at around 6.75%. Most economists expect mortgage interest averages to fall even further through 2024, potentially landing at just 5.5% by the end of the year. Currently, Federal Reserve projections indicate three rate cuts between now and the end of the year, totaling three-quarters of a point. As a result, many homeowners who have been hanging onto their low rates may finally decide it’s time to upgrade, becoming buyers as well as sellers.

8. Realistic Home Pricing

Home prices will stabilize in 2024, with the majority of Sarasota homes (74% as of December 2023) selling for less than the listed amount. That’s not the story for every seller, however. About 11% of properties still sell for well over asking.

Some sources suggest a steeper decrease in 2024. Sarasota property prices could decline by nearly 5%: more than in any other Florida metro area. This may provide a long-awaited opportunity for many first-time home buyers. Keep in mind that the price decrease will seem much more gradual than the steep rise the market experienced from 2020 through 2022.

9. More New Builds

Sarasota had the most new homes under construction in the U.S. last summer. As of January 2024, developers were building more than 218 new units per 100,000 residents. While these projects give buyers more selection, some sellers could find that their properties struggle to compete with new builds.

While single-family homes remain popular, buyers have shown a growing preference for multi-use condo communities that incorporate residential space and high-end amenities. Several new buildings will open in downtown Sarasota in 2024 with features like rooftop pools and yoga studios. Buyers will also find boutique townhomes with private gardens, terraces, and floor-to-ceiling windows.

You need a knowledgeable local agent to guide you when you decide to enter the challenging, ever-evolving Sarasota real estate market. Connect with the RE/MAX Florida team today whether you’re buying or selling a home in this vibrant, sought-after city.