Gulf Coast housing markets remain hot, but a lack of inventory threatens future gains.
Many Gulf Coast residential real estate brokerage firms are coming off their best year ever, thanks to an influx of new residents and low interest rates, according to an annual ranking.
Moving into 2021, that trend shows few signs of ending. Companies that generated record sales and transactional volumes in 2020 say the new year is off to an equally impressive start.
“It’s just an incredible market that we’re in right now,” says Michael Saunders, whose Sarasota-based brokerage Michael Saunders & Co. operates 26 offices and has 600-plus agents in Sarasota, Manatee and Charlotte counties.
“The first quarter of this year was the best three-month period in company’s history,” Saunders adds. “And I don’t see the momentum ending. Buyers are not flipping these homes, they’re occupying them.”
Saunders’ record $3.42 billion in transactional volume in 2020 represented a 28% gain from the year before, earning a ranking of 70th among the largest U.S. brokerages, according to RealTrends 500, an annual list.
Saunders attributes the demand to a mix of local buyers and in-migration from the Northeast and the Midwest.
She adds that some properties receive as many as 20 offers when they hit the market. Incoming referrals from the Leading Real Estate Companies of the World, a trade group with 550 firms from 70 countries that Saunders is a part of, meanwhile, have doubled from the same time in 2020.
Premier Sotheby’s International Realty, a Naples-based firm that operates 40 offices and ranked No. 21 in the U.S. by RealTrends for 2020 with a transactional volume of $6.86 billion — the highest of any Gulf Coast firm — experienced similar first quarter gains.
Budge Huskey, Premier Sotheby’s CEO, says sales rose by 75% in the first three months of this year as compared to 2020, while sales prices have climbed 15% during the same period.
In 2020, Premier Sotheby’s transactional volume rose by 36.5% vs. 2019, while the company participated in nearly 23% more sales than the year prior.
In all, 13 Gulf Coast residential real estate companies from Clearwater to Naples were ranked among the top 500 by RealTrends.
Combined, they generated transactional volume in excess of $31 billion in 2020, on the strength of more than 72,300 sales.
In the Tampa Bay area, Smith & Associates Real Estate’s six offices and 282 agents produced a record transactional volume of $1.6 billion, earning slot No. 208 on RealTrends’ list.
Nikki Phillips, a Smith & Associates vice president, says many of the sales in 2020 stemmed from Tampa Bay’s heightened visibility.
Like Saunders and Premier Sotheby’s, Smith & Associates also saw continued forward momentum in the first quarter.
The firm’s average sales price, for instance, thus far in 2021 has been $660,000, vs. an average of $625,000 last year.
“I don’t foresee a decline occurring this year or into next year,” Phillips says. “There’s still tremendous pent-up demand for homes in this area.”
In addition to the aforementioned companies, RealTrends also noted that Charles Rutenberg Realty Inc. of Clearwater, Keller Williams—Chadwick Group of St. Petersburg and Keller Williams of Central Florida, in Lakeland, also made its list from the Tampa area.
In the Sarasota/Manatee submarket, Re/Max Alliance Group was ranked for its $1.61 billion in sales volume last year.
John R. Wood Properties, Premier Plus Realty and Downing-Frye Realty Inc., of Naples, Re/Max Anchor Realty of Punta Gorda, Re/Max Realty Team of Cape Coral and Re/Max Palm Realty, of Port Charlotte, also earned spots among the top 500 nationally.
In some cases, sales jumped dramatically.
Premier Plus’ volume was up 46%, last year, while Re/Max Anchor’s volume surged 53%.
But amid the significant gains, Saunders and Phillips worry that a lack of inventory could hamper future performance.
“Inventory is down 76%, which is a stunning number,” Saunders says.
For homes priced at $1 million and under, there remains on a 15-day supply — meaning the average length of time it would take between when a property is listed for sale and a purchase is committed to. At $1 million and above, the time on market is down to 1.3 months. During the recession that began in 2008, by comparison, homes costing $1 million and up could be on the market for years.
Phillips says there’s a less than two months’ supply of inventory around the Tampa area, a contrast to the five- to six months agents say represents a “healthy” market.
“I don’t see the current market changing until there are many more months of inventory,” she says.