Many people continue to relocate to the Suncoast from the Northeast, as well as other parts of the country, for both the climate in Florida and the high-quality of life in Sarasota. Unsurprisingly, buyers gravitate toward beautiful locations like Sarasota and Manatee County.
While the recent market shift in Sarasota may seem concerning to some buyers and sellers, this reality aligns with the national trend of a cooling market and appears to be a healthy correction rather than a market crash. Taking a closer look at these trends sheds light on the Sarasota real estate market as we review the past year and anticipate where things are headed.
2024 Housing market recap
The housing market recap for 2024 reflects an increase in home affordability when adjusted for inflation which has been steadily declining over the past two years and reached its lowest point - a positive sign. Also, inventory showed an upward trend towards the end of this year.
Interest rates and diverse real estate demands contributed to the arc of Sarasota’s housing market throughout the past year. When interest rates rose, the market experienced a slowdown. The local housing market reflected a shift from the competitive sellers’ market that characterized recent years. Buyers now have more purchasing options and less pressure when considering making an offer. This indicates a healthy and normative market correction. A stabilizing market suggests an opportunity for measured sustainable growth.
However, Southwest Florida’s desirable location and climate, tax-friendly environment, and steady influx of new residents continue to position Sarasota as a prime destination for home buyers. Local property prices saw a moderate decrease from last year but remained strong compared to the national home prices. This decrease reflects several factors – buyer demand, inventory levels, and seasonal variations.
As we step into 2025, multiple economic and social drivers will influence the Sarasota real estate market for potential buyers, sellers, and investors alike.
The top factors that may impact buying and selling forecast:
Interest Rates: As inflation pressure subsides, experts predict rates will likely level off or see a slight decline in 2025. Lower mortgage rates could assist first-time buyers and those looking to move up in the market. Most analysts believe rates will stabilize or gradually decline as inflation will likely be brought under control. This potential stabilization could impact both buyers and sellers.
New Construction and Supply: Sarasota's housing market is expected to continue to have a healthy buyer demand. The need for accelerated new construction remains a factor, especially single-family homes in 2025. Builders struggled to meet the demand due to the influx of new residents, limited housing supply, and rising construction costs. Inventory challenges may remain putting pressure on prices, notably in high-demand areas.
Seasonal Variations: Sarasota’s market experiences seasonal fluctuations, a common aspect of tourist-driven areas. Demand usually picks up during the peak of the tourist season and puts upward pressure on prices; yet, while demand may decrease significantly during other parts of the calendar year. Seasonal fluctuations play a crucial role in making year-to-year comparisons regarding the number of sales.
Remote Work Flexibility: This proliferation of remote workers continues to reshape demand by attracting workers seeking larger homes, outdoor spaces, and home office spaces. Many workers relocate to Florida, in part, to take advantage of favorable taxes and beautiful weather. As companies continue to embrace or even expand the option of remote work, this real estate landscape will reflect this reality in 2025.
Population Growth: Most of the new residents in Sarasota seek luxury homes, waterfront properties, and access to amenities such as golf courses, marinas, and upscale communities. High-demand areas like Sarasota, Naples and Palm Beach appeal to this demographic, so the luxury real estate market will likely remain robust. Interestingly, a portion of buyers already live here and remain invested in our community as they seek a first home, a more functional residence, or even an income property.
Investment opportunities: The 2025 real estate market stands out as one of the top choices for local investors. Sarasota and the wider region attract tourists annually. The wisdom of owning short-term rental property makes undeniable sense for investors in 2025. The demand for retirement communities and properties will increase as more baby boomers make transitions from their working years. So, investors who can tap into these markets could see strong returns, especially in Sarasota and areas experiencing increasing numbers of investors, job growth and overall population growth.
Challenges come with making precise long-term projections. Still, trends and factors provide a reasonable expectation for continued demand and a period of increasing market stabilization before returning to a rapid growth phase.
Ready to make your move in the 2025 real estate market? I understand the nuances of this fast-evolving landscape and I am here to guide you every step of the way. I’m consistently ranked among the top performing realtors for my many years of experience and negotiation skills in the Sarasota market. With a unique blend of local expertise, market insights, and unwavering client commitment, I can help you make well-informed decisions. If you plan on selling or looking to find some excellent buying opportunities in the areas of Sarasota – call me today at (941)266-0529 to ask any questions about buying or selling Sarasota real estate this year.
