A cheap condo is getting harder to find in Manatee and Sarasota counties.
Year-end incentives from homebuilders and demand from Canadian buyers are pushing area condo sales up to 21 percent higher than the same time last year, according to Multiple Listing Service data for Manatee County.
It's great news for sellers, but the surge is cutting into the choices buyers have as the residential real estate season heads into the prime winter months. It's also giving sellers good reason to increase prices.
As of the end of October, Manatee County had 756 condos and townhomes on the market, according to statistics compiled by Orlando-headquartered Florida Realtors Association from multiple listing data. That's roughly a third as many on the market four years ago.
The relative scarcity hasn't kicked off a building boom. But area real estate professionals do agree that it's getting more difficult to find condos in the $150,000-and-under range.
"I think that's an inventory problem," said Tom Heatherman, communications director for Sarasota-based real estate broker Michael Saunders & Company.
Demand is higher than the supply, he said, which is leading to more sales with multiple offers. Prices in the condo market are increasing: The average sales price of condos and town homes in Manatee County has risen from $163,878 in October 2012 to $168,728 this year, according to Florida Realtors.
condo price range is the most popular among buyers in Manatee and Sarasota counties, with about 60 percent of condo sales and pending condo sales coming out of this category in October. Statistics produced for Michael Saunders by Sacremento, Calif., real estate analytics firm Trendgraphix show the supply in the price range dropping by 150 units from the same time last year.
Trendgraphix shows 584 condos on the market in Manatee County at the end of October.
Peter Crowley, president and co-owner of Re/Max Alliance Group of Manatee and Sarasota counties, said that while an uptick in condo construction is likely in the near future, some potential sellers could soon bring previously foreclosed and other distressed condos onto the market.
"I still believe there is a shadow market from the sheer numbers of foreclosures that have been processed," he said.
The promise of new inventory isn't prompting buyers to wait, or keeping some sellers from cutting a deal. At River Strand, a planned community near State Road 64 and Interstate 75, a sign announcing a "year-end condo sale" has been up for months.
Bill Weed, a Realtor with Michael Saunders who has sold a number of condos in River Strand, said community developer Lennar is offering incentives to get units off its books before the end of the company's fiscal year on Nov. 30.
Those incentives have included price reductions up to 20 percent, payment of closing costs, and paid membership in the community's country club.
"You can ask for quite a bit right now," Weed said.
List prices for the Terrace Condominiums at River Strand range from $169,000 to $175,000, according to Lennar's website.
Weed said outside of special sales offers, he has seen condo prices increasing steadily for the last six months. He expects the trend to continue.
The short supply of inexpensive condos is making condo searches more involved for some buyers. Crowley said buyers with narrow parameters for their condo search are finding less choice.
Buyers may also be stretching their budgets. Brokers selling in the local condo market note that the biggest sales growth in the sector is coming in the $200,000 to $500,000 price range. Thirty-three percent of condo sales in Manatee and Sarasota counties in October were in this range.
About half of Weed's buyers are Canadian citizens. All of them pay cash for the homes they buy. That's in line with state statistics as a whole, which show that 65 percent of all October residential sales were made in cash, according to Irvine, Calif., real estate information firm RealtyTrac.
Cash has been king in the condo market since the real estate market crashed in 2006 and 2007. Deanna Atkinson, president of the Manatee Association of Realtors and managing broker for Coldwell Banker's Manatee office, said finding a bank that will finance a condo purchase is still "challenging." That leaves many buyers who need financing out of the market.
Thirty percent of all residential sales made by her office this year have been to foreign buyers. Of that number, 75 percent were Canadians.
Weed said his Canadian buyers generally to come to Florida with cash pulled as home equity loans from their primary residences, or from their savings accounts.