Sarasota is one of the best vacation places in Florida, and while it is not among the most expensive places to live in, it is not also the cheapest. The latest property data showed 2021 was a good year for the city’s real estate sector. Interested property buyers are looking at the Sarasota housing market forecast 2022 to determine if the Sarasota real estate market will remain strong.
Whether you are buying a property as your primary residence or as an investment, knowing what Sarasota can offer you and the potential buyer or tenant is essential. So, before you wrap your head around the Sarasota housing market forecast 2022, find out if it is a good place to invest in.
Why Live in Sarasota
U.S. News looked at around 150 metro areas in the United States to find the best places to live based on several factors, such as quality of life and the existing job market. At a glance, this is how Sarasota fared in the study.
Overall, it ranked No. 9 among the best places to live. The study evaluated specific categories, and Sarasota garnered good rankings in all categories, as follows:
- Best Places to Retire: No. 1
- Best Places to Live in Florida: No. 2
- Best Fastest-Growing Places: No. 2
- Safest Places to Live: No. 5
- Best Places to Live for Quality of Life: No. 15
Related: The 10 Best Airbnb Rental Markets in Florida
Downsides to Living in Sarasota
Despite being included in the top best places in the US, some factors might drive away potential buyers from the Florida housing market.
Affordability
The average rental prices in Sarasota, higher than in Tampa and St. Petersburg, indicate that the cost of living in the city is not low. Florida does not impose a state income tax. However, it does not necessarily mean that its residents can save on taxes because the state government charges high property taxes.
Terrible Heat Index During the Summer
Air-conditioning units need to be installed in every home because the temperature can get extremely hot during the summer, which would mean an increase in utility expenses.
Prone to Hurricanes and Tropical Storms
The State of Florida sees more hurricanes and tropical storms than any other state in the US.
Make sure to consider the abovementioned downsides as you study the Sarasota housing market forecast 2022.
Real Estate Market Drivers
What drives the housing market in Sarasota? What’s in store for real estate investors according to the Sarasota housing market forecast 2022? Below, we take a peek at why the Florida real estate market can be an attractive option and how the said factors influence the Sarasota housing market.
1. Equitable Landlord-Tenant Laws
The landlord-tenant laws of Florida balance the needs of the landlord and the tenant. As they protect the welfare and rights of the tenants, such laws encourage landlords who are looking at making money in real estate investment. In brief, Florida’s rental laws offer the following:
- No rental control
- No state income tax
- Relatively low insurance costs and taxes
- An appealing and affordable alternative to buying a house
Related: 10 Florida Landlord Tenant Laws You Should Know
2. A Booming Job Market
The city continues to enjoy a robust economy, characterized by diversified trade, mainly in health care, hospitality, retail, and social assistance. Among the large companies found in Sarasota are CapGemini, The Zenith, and APAC Customer Services. Sarasota recorded an unemployment rate of 3.5% as of October 2021. With more companies planning to put offices in the city, the job market looks brighter.
The region’s popularity as a vacation place and tourist destination is helping create an abundance of jobs related to hospitality and service. Similarly, the city’s elderly population steadily requires healthcare jobs.
The city is highly industrialized, with manufacturing, shipping, and software development providing the largest number of jobs. Other jobs not common in other cities are also available in Sarasota. They include jobs in nuclear medicine technology, zoologists and wildlife biologists, skincare specialists, and a few others. They are luring the younger set to move to Sarasota.
3. Increasing Population Growth
Sarasota City reported a population of 58,285 in 2019, up by 10.6% from the 2000 Census. With out-of-state transfers of individuals and businesses, its population’s been growing steadily. The growth may not be much, but it will still bring more development to the community.
4. Basic Amenities and Leisure Spots
With its diverse population, the city is rich in cultural offerings with its museums, art galleries, music venues, and historic sites. Add to that the awesome beaches, dining places, and wonderful outdoor amenities, and you get to enjoy a paradise-like setting.
5. Quality of Life
Since about one-third of its population are retirees, Sarasota is known for its laidback lifestyle. However, it does not lack modern facilities, recreational sites, excellent housing facilities, and quality services. For professionals, Sarasota is a place to enjoy a work-life balance. The tranquil atmosphere is good for de-stressing, and the absence of traffic spares them from the hustle and bustle of city life in other states.
The city is ideal for raising a family as it promotes education, youth development, and healthy living.
Beaches and other leisure spots help drive the Sarasota housing market.
Sarasota Real Estate Trends and Statistics in 2021
The REALTOR® Association of Sarasota and Manatee (RASM) reported that, based on the data from Florida REALTORS®, 2021 was another banner year for the region’s housing sector. Sarasota real estate prices increased, sales soared, and inventory went to a low of less than a month.
Impressive Sales
Sarasota’s housing market recorded an increase of 14.9% year-over-year (YOY), translating into 28,764 home sales. If we break down the sales by home type, single-family homes increased by 13.4% YOY, bringing total sales to 10,798 units. On the other hand, condo sales saw an increase of 21.6% to a total of 5,634 units.
The “exodus” to Sarasota city of people from other parts of the United States boosted real estate sales in 2021. Suddenly, it is no longer just the retirees moving to the city. People from places in lockdown opted to move to Florida, where there were fewer restrictions and better chances of building a business. Individuals who wanted to evade the high tax rates in other states added to the flock. People from all generations, most of the families, choose to buy properties for long-term, if not permanent, use.
High Housing Cost
The surge in sales reduced the inventory tremendously, so the Sarasota housing market became very competitive. With the high demand for housing and low supply, prices were pushed to a record high, making Florida among the least affordable places to live.
In December, the prices of single-family homes reached around $435,800 and condos, $360,000. The trend in price increase caused hesitation among new buyers as sellers/homeowners enjoyed their return on investment.
Low Inventory
According to Redfin, single-family home inventory plunged by about 60% in December. It was worse for condos, whose inventory slumped by 76%. On average, Sarasota homes sell after nine days in the market, a big difference from 30 days in 2020.
How do the aforementioned trends figure in the Sarasota Housing Market Forecast 2022?
Sarasota Housing Market Forecast 2022
According to Zillow, the 2022 US housing market may not be a record-breaking one as it was in 2021, but it will still be impressive.
Home Value Growth
Further, it predicts a home value growth of 11% in 2022, significantly lower than its 2021 projection of 19.5%. Home sales are expected to reach 6.35 million, higher than 2021’s forecast of 6.12 million.
A Seller’s Market
With homes staying on the market longer than they did in the previous periods, sellers will likely reduce their prices. It will continue to be a seller’s market until more houses are built to increase the inventory and satisfy the surge in demand.
Higher Demand for Rental
The rising prices of houses will lead to a higher demand for rentals, a more affordable option for those who do not have enough resources to make a down payment. As demand for rentals increases, expect rental costs to ramp up.
“Youth Invasion”
Young Americans, millennials, and GenZers will invest in a second home even before getting a primary home, an offshoot of the remote-work setup. Although they are not ready to settle permanently in a new location, the young working population will take advantage of the opportunity to mix work with pleasure and opt to stay in their chosen location for a longer time.
Sarasota is ideal for both markets. The city’s wonderful beaches, busy nightlife, shopping outlets, and open areas that encourage walking, cycling, and other activities associated with a healthy lifestyle are great come-ons for the young population. Sarasota’s burgeoning job market adds to the appeal, as it gives them more career opportunities.
The Power of the “Aging Population”
Similarly, the Great Resignation emerging from the pandemic and the nation’s aging population will see a marked increase in demand for retirement markets.
Sarasota is an easy choice for retirees, who are attracted by its laidback lifestyle and idyllic environment.
Should You Invest in Sarasota Real Estate in 2022?
Looking at the Sarasota housing market forecast 2022, the answer is a big Yes! Despite the increase in median prices and the low house inventory, real estate will continue to be Sarasota’s cash cow. The problem of low inventory and the significant increase in prices might diminish the sales performance in 2021. However, in a major boost for the Sarasota housing market forecast 2022, sales will still be favorable in 2022. The key factors that attracted people to invest in Sarasota are still there. They continue to develop, so there are more reasons to invest.
The latest Sarasota housing market forecast points to a bullish 2022 real estate market.
Related: How To Perform a Real Estate Market Analysis
Top 5 Sarasota Neighborhoods for Traditional Rental Investment in 2022
Overall, despite the decline in inventory for rentals, you may still set your sights on the following places if you want to pursue a long-term investment.
1. Avondale
- Median Property Price: $225,450
- Price per Square Foot: $230
- Average Traditional Monthly Income: $1,558
- Average Traditional Cash on Cash Return: 4.76%
2. Arlington Park
- Median Property Price: $535,355
- Price per Square Foot: $327
- Average Traditional Monthly Income: $2,235
- Average Traditional Cash on Cash Return: 3.51%
3. Alta Vista
- Median Property Price: $807,000
- Price per Square Foot: $472
- Average Traditional Monthly Income: $1,817
- Average Traditional Cash on Cash Return: 1.65%
4. Bellevue Terrace
- Median Property Price: $551,000
- Price per Square Foot: $291
- Average Traditional Monthly Income: $1,581
- Average Traditional Cash on Cash Return: 1.22%
5. Terrace Gardens
- Median Property Price: $982,450
- Price per Square Foot: $360
- Average Traditional Monthly Income: $2,496
- Average Traditional Cash on Cash Return: 1.00%
Top 5 Sarasota Neighborhoods for Airbnb Investment in 2022
If you want to adopt short-term rentals as a real estate investment strategy, check out the following neighborhoods with good potential.
1. Avondale
- Median Property Price: $225,450
- Price per Square Foot: $230
- Average Monthly Airbnb Rental Income: $1,926
- Average Airbnb Cash on Cash Return: 4.10%
- Average Airbnb Occupancy Rate: 61%
2. Park East
- Median Property Price: $275,000
- Price per Square Foot: $247
- Average Monthly Airbnb Rental Income: $1,869
- Average Airbnb Cash on Cash Return: 3.30%
- Average Airbnb Occupancy Rate: 50%
3. Arlington Park
- Median Property Price: $535,355
- Price per Square Foot: $327
- Average Monthly Airbnb Rental Income: $2,433
- Average Airbnb Cash on Cash Return: 2.70%
- Average Airbnb Occupancy Rate: 59%
4. Alta Vista
- Median Property Price: $807,000
- Price per Square Foot: $472
- Average Monthly Airbnb Rental Income: $2,561
- Average Airbnb Cash on Cash Return: 2.00%
- Average Airbnb Occupancy Rate: 59%
5. Bellevue Terrace
- Median Property Price: $551,000
- Price per Square Foot: $291
- Average Monthly Airbnb Rental Income: $2,186
- Average Airbnb Cash on Cash Return: 1.30%
- Average Airbnb Occupancy Rate: 58%
Related: How to Access Airbnb Occupancy Rate Data in 2022
Conclusion
Real estate investment is a lucrative venture but a complex one. You need to be constantly on the lookout for the latest market trends and forecasts in order to make informed decisions. Make yourself aware of the Sarasota housing market forecast 2022 in order to succeed in real estate investing.
The article above determined that the 2021 real estate market was characterized by high prices, low inventory, and a surprising increase in sales. Based on the Sarasota housing market forecast 2022, the same trend will continue, although probably a bit tempered. The changing lifestyle brought on by the shift to work-from-anywhere, the Great Resignation, and America’s aging population is expected to influence the market in the current year. The continuing increase in prices will also lead to a higher demand for rental properties, making it a wise real estate investment strategy for 2022.
Is it wise to invest in Sarasota? Mashvisor’s put together the following Sarasota market data for you to analyze. The data gives you a glimpse of the 2022 housing market in Sarasota.
- Median Property Price: $1,080,076
- Price per Square Foot: $500
- Listings for Sale: 232
- Days on Market: 66
- Walk Score: 50
Traditional Rental
- Listings for Sale: 1,237
- Average Traditional Monthly Income: $2,647
- Cash on Cash Return: 2.21%
- Price to Rent Ratio: 34
Airbnb
- Listings for Sale: 849
- Average Monthly Airbnb Rental Income: $2,565
- Daily Rate: $176
- Cash on Cash Return: 1.14%
- Occupancy Rate: 52%
- Price to Rent Ratio: 35
However, market analysis is not something that everybody would relish. If you are one of those who cringe at the sight of too many numbers and can’t figure out what to do with them, let Mashvisor help you with the analysis to find out if you are on to a financially rewarding investment.