It might be a chapter from the book of the obvious: Sarasota, with its luxury cars and mansions, has for years been known for its affluence. This year, however, that affluence has exploded and with it the demand for luxury housing.
The annual "A Look at Wealth 2021: Real Estate’s New Power Players" report, recently published by international real estate company Coldwell Banker, points to new standouts in the market and significant growth in real estate wealth from 2019 to 2021. Led largely by baby boomers, (ages 57 to 75), Sarasota was called out as one of its top three “Power Player” markets.
Due in part to the pandemic, affluent boomers gravitated toward locations that offer a balance of outdoor activities, luxury property inventory, a strong community of retirees and low tax burden. Sarasota, with its year-round sunny weather, thriving arts scene and relaxed, beachy charm, fit the bill.
As affluent Gen Xers battle it out for large, single-family homes in the suburbs, many boomers have cashed in on the equity of their primary residence and relocated to rural spaces and resort towns.
Nationally, the $1-million to $5-million range saw the highest number of properties sold. Today, nearly three times as many individuals with a $5-million-plus net worth own in that $1-million to $5-million real estate bucket, compared to 2019 – a 180 percent increase in luxury property ownership.
Sarasota numbers tell a similar story. More than half–60.6 percent–of properties in that price range are owned by baby boomers.
"In the last 12 months, 112 houses with more than a $5-million price tag in Sarasota and Manatee sold. The year before that it was just 23," says longtime real estate agent Roger Pettingell of Coldwell Banker Realty in Sarasota, who specializes in luxury home sales.
In Sarasota County, houses in the $1-million to $5-million range saw a big uptick in demand: 2019 saw 466 properties in that price range sell, in 2020 that number grew to 735 and year to date, there have been 1,107. And those increases are expected to stay their course. It's projected that by the end of 2021 there will be a 171 percent increase of sales in the $1 million-$5 million range (based on the rate of sales that occurred between January and August 2021).
The report also highlights trends in the luxury market, among them that of skipping out on the downsizing phase as a result of the pandemic.
Pettingell says the “less is more” movement has faded out. "Bigger and better" is the preference among his affluent clients.
"The memory of a pandemic is fresh, and people want office space, workout rooms and media rooms. They want home entertainment spaces and as much outdoor space as they can afford," he says. "They also want room to host family. Many kids stayed with parents while colleges were shut down, and they want to be able to do that again. They're also adding anything that makes the home your castle again, so items like resort-style pools are huge."
Other than the weather and the low tax burden," people are looking for family health and safety," Pettingell says.
That's why gated communities are popular and all the latest security monitor systems are a must. Many of his clients also want to be near a hospital and doctors' offices in case of emergency.
There are more expensive homes to choose from these days, but that wouldn't exist without demand. "We didn't have that inventory before. Within the last five years, we just started having the product people want, like the Ritz Residences and The Epoch," he says. "That's why we're seeing a lot of high-end building going up."
Other top "Power Player" luxury real estate markets in the report include South Carolina Lowcountry; Scottsdale, Arizona; and Coeur D'Alene, Idaho. As the pandemic subsides, bigger cities like Chicago and San Francisco are also roaring back to life.