Boomers Relocating to Sarasota: How to be a Defensive Home Buyer

You may be sure of what your intention is for your move to Sarasota. And now you're ready for the fun part: looking for a house or condo. Before you make any commitments, I'd like to offer my opinion about market conditions here and how to be perhaps more defensive in your approach.

Here in Sarasota, it's becoming (already is?) a seller's market. Houses in my neighborhood, whether at the $169K or +$400K range, are selling quickly . . . as, in a week. We're on the ascendant side of a boom, with lots of new large condos, hotels, going up downtown, as well as many tear-downs-with-new-houses and remodels in the neighborhoods. 

So, hopefully, prices will continue to rise. However, one never knows when ascent will shift to descent. So many variables can conspire--local, national, international--as we saw in the boom-bust of 2000-2012.

Unless you're in the 1%, or you're a cash buyer, if you pay top-dollar now for a house, and you decide for whatever reason(s) that you don't want to be here long-term, and if market conditions shift, you risk being stuck with property that you can't afford to sell, thus limiting your options for moving elsewhere, and threatening your credit rating if you short-sell.

I noticed last night on Zillow that there are still quite a lot of properties listed as foreclosures or preforeclosures. You might consider looking at foreclosures in the various neighborhoods you're targeting. At least then you may find a below-market property, so you have profit potential if/when you decide to sell it.

However high this market rises--and with Boomer demand, it looks like no end in sight for awhile--some houses will never resell for what the current owner paid now. An extreme example is a house in an east-of-the-Trail neighborhood that sold in August for $620K, while Zillow values it at $384K. (I know Zillow isn't perfect, but I use it for illustration purposes.)

If I'm wrong, and the high prices endure, that will be great for me, you, and everyone else. But there's no downside to keeping more of your money liquid and only spending what you absolutely need on the cute little cottage or airy condo you dream of. Much easier to upsize later than to be unable to downsize.