In
SUMMER 2021 EDITION
Conversation
DARCIE DUNCAN, BROKER/OWNER DUNCAN REAL ESTATE
BEN GRAHAM, LICENSED REALTOR MICHAEL SAUNDERS & COMPANY
IN CONVERSATION WITH REAL ESTATE AND CONSTRUCTION LEADERS IN THE REGION ON THE FUTURE OF COMMERCIAL AND RESIDENTIAL REAL ESTATE AND DEVELOPMENT. BUDGE HUSKEY, PRESIDENT & CEO PREMIER SOTHEBYâS INTERNATIONAL REAL ESTATE
WEâVE ASSEMBLED A PANEL OF EXPERTS TO DISCUSS ONE OF THE PRIMARY ECONOMIC DRIVERS FOR OUR COMMUNITY; REAL ESTATE. BUDGE HUSKEY: I am the President and CEO of Premier Sothebyâs International Realty. We operate mainly in two states, but principally in Florida from Marco Island up through
DAVID SESSIONS, PRESIDENT & CEO WILLIS A. SMITH CONSTRUCTION
Tampa and over to Central Florida, and we go up to North Carolina in Charlotte, Asheville, and some of the high country. We are ranked the 19th largest residential brokerage firm in the country. Weâre number two worldwide in terms of Sothebyâs network. And last year, we did 7.1 billion in sales, and hopefully this year, weâre going to
ALEXANDRIA TWIGG, BROKER ASSOCIATE & PARTNER, LUCIDO GLOBAL OF KELLER WILLIAMS REALTY
beat that by even a larger margin. ALEXANDRIA TWIGG: I work for Keller Williams, downtown Sarasota, KW On the Water. I have been with them since 2017. Iâm now a broker associate, and I run Lucido Global, the largest Keller Williams expansion team in the country. We are based out of Baltimore. DARCIE DUNCAN: I
INTERVIEW BY WES ROBERTS
am the broker-owner of Duncan Real Estate. And this July is our 20 year anniversary. Iâve been in real estate for 31 years here on Anna Maria Island, and I was raised on Anna Maria too. You could say Iâm a unicorn - being raised on Anna Maria makes me that rare. I was chairman of the board of the Manatee Chamber of
ENGAGING READERS THROUGH STORYTELLING.
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ABOUT THE PARTICIPANTS DARCIE DUNCAN, DUNCAN REAL ESTATE Duncan is a lifelong resident of Anna Maria Island and owner-broker of Duncan Real Estate. As an island native, Darcie possesses an unparalleled understanding of the Florida Gulf Coast culture, its history, growth, and development. This year marks 31 years in the industry and the 20-year anniversary of her boutique real estate firm. She has successfully closed over 850 million dollars in real estate sales and is on track for a record sales year. Her recognitions include Business Person of the Year, Top 100 Women in Business, Manatee Chamber Small Business of the Year, as well as serving her community by volunteering on several non-profit boards and past Chairman of the Manatee Chamber of Commerce. BEN GRAHAM, MICHAEL SAUNDERS & COMPANY As a United States Marine, Ben learned the value of honor, courage and commitment which have translated into all aspects of his business career. His passion for customer care and providing exceptional service creates a genuine trust in his professional relationships that go beyond simply âdoing the deal.âBen has excelled in several of Sarasotaâs top firms. The Ritz Carlton, PGA Fed-Ex Tour Sponsorship sales and SRQ Magazine are where he learned and polished the fundamentals of customer service. His easy-going yet professional approach to the clientele he serves creates a sense of confidence that translates into continued business and a mutually beneficial relationship.
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Commerce in 2017. The island is my passion. My specialty is waterfront real estate. Increasingly âon the islandâ means luxury property. BEN GRAHAM: Iâm with Michael Saunders Commercial, downtown Sarasota. Iâve lived in the community for about 17 years and been in sales for 13 of those years, and specifically commercial real estate, right around six years. and food. DAVID SESSIONS Iâm David Sessions, President and CEO of Willis A. Smith Construction. We construct just about everything except any type of residential project. Our firm is based in Lakewood Ranch. Our primary work area is Southwest Florida. Our firm has a mixture of public sector work, libraries, fire stations, schools, colleges, universities, and also private sector work, consisting of offices, retail, religion. You name it. Our companyâs vision is really to build a communityâs landmarks. You will see our name associated with things such as the Patriot Plaza at Sarasota National Cemetery, the Asolo Repertory Theater, the Opera House, Selby Gardens, Mote Marine, Ringling College, just to name a few. LETâS START BY DISCUSSING THE STATE OF THE RESIDENTIAL MARKET. HUSKEY: The Sarasota market, as well the entire Gulf Coast, has been a desirable area for some time. The natural trend was going to be a positive one what the pandemic serves as an incredible disruptor and an accelerator. We all anticipated an economic shutdown a year ago. It proved to be just the opposite in terms of the acceleration of life decisions and asset investments.If you look at Q1 in Sarasota County, overall closed sales were up 35% year over year by the end of the first quarter. Weâre in a position right now where we have far more demand than supply. Our supply is under a month, which is absolutely unheard of. And as a result, we
see a redefinition of values and prices. Also, the higher the price, the higher the level of increase year over year in sales. So luxury has absolutely exploded, which has led to an increase in average sales prices in Q1 in Sarasota by roughly 35% as well. It is quite surreal. Itâs a great sellerâs market. Itâs a horrible market for buyers. WHEN WE TALK ABOUT HAVING âLESS THAN A MONTH ON INVENTORY,â WHAT DOES THAT MEAN HISTORICALLY? TWIGG: They always say, âSix months of inventory up, buyerâs market. Six months less, sellerâs market.â So the fact that we donât even have half of a month of inventory on the market is leading to multiple offers, bidding wars, people purchasing from all over the world not even seeing these properties. If you look back at December when we ended the year, our average price per square foot just in Sarasota County was $239. In March, the average price per square foot was $276. Thatâs a $37 a square foot raise in one quarter. Itâs unheard of. So if you look at the trend going upwards, weâre just flying right now. Nationally the trends say that once a majority of the population is vaccinated, we will see an increase in inventory. I donât necessarily think thatâs going to happen here in our area. WHAT DO THESE MARKET FORCES MEAN TO A CONSUMER? DUNCAN: Part of the problem right now is the lack of inventory. The marketâs stagnated because you have a lot of sellers that are sitting on the fence wanting to sell, especially in a high market, but where are they going to go? Whereâs a lateral move? So if you have a high market, then theyâre going to buy high. They have nowhere to go. You have a lack of long-term rentals as well, so itâs very difficult for people to make a move right now, especially
if you want to move within your own neighborhood, so to speak. You are seeing investors driving a lot of the properties to hold rental properties. How does a first-time home buyer compete with a cash buyer that can waive all their contingencies, and the first-time homebuyer canât do it? Theyâre just not in a position to do that. So itâs very difficult on those families just starting out. TWIGG: When you look at the grand scheme of things, with the plummet of the interest rate, three and a half percent is still better than 11%. So people are still saying, âEven though I am overpaying, the interest rate difference is making up for the equity.â Buyers are taking advantage of the low-interest rate and still attempting to buy. Thatâs why we see multiple offers. Weâre seeing more people selling who maybe this is their second home. This is their investment property. Weâre seeing people liquefy their assets. Weâre also seeing people fleeing here from New York, Pennsylvania, Michigan, the Midwest, places where theyâve been shut down for a year. The people who are selling their homes currently are people who are liquefying their assets. I know somebody who just listed a home $200,000 above the average price that has sold in that neighborhood, and they went and are closing way above ask. So youâre looking at a $275,000 profit. HUSKEY: Weâre talking about a lack of supply, but it isnât as though the number of listings has declined significantly. The seller patterns havenât fundamentally changed. Itâs that the buyer demand has exhausted our inventory. We are all out here trying to build inventory and encouraging people, âIf youâve ever considered selling your houses, itâs time to do it.â But most of them say, âWhere am I going to go?â So, to Alexandriaâs point, unless theyâre just trying to liquidate a second asset, they donât have
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BUDGE HUSKEY, PREMIER SOTHEBYâS INTERNATIONAL REAL ESTATE With almost 40 years of experience in building successful real estate companies, Budge Huskey is recognized as an industry leader in both brokerage and franchising. Overseeing the operations and growth strategies of the companyâs 40+ offices and 1,400 sales associates in Florida and North Carolina, he led the firm in achieving a record-breaking $7.1 billion in total sales volume in 2020. DAVID SESSIONS, WILLIS A SMITH CONSTRUCTION David E. Sessions is the Owner and President/CEO of Willis A. Smith Construction, Inc., a Sarasota-based construction management firm. David has had more than 39 years of multi-disciplined experience in educational, healthcare, religious, green sustainable, industrial and commercial construction. Davidâs quiet and conservative demeanor does not reveal that he is a community power player who gets things done. He believes in keeping all things local, and when he gives his time and talent to our community, our community gets stronger. ALEXANDRIA TWIGG, LUCIDO GLOBAL A Sarasota native her entire life, Alexandria Twigg started her real estate career in 2015. With a strong passion for the housing market and helping clients, Alexandria has excelled in her beginning years of real estate being a top producer on her team, while being named Team Leader for the Sarasota Lucido Global Expansion Team, and voted Rookie of the Year. Alexandria is an active member of the Suncoast Young Professionals Network and Keller Williams Young Professionals. She has won the Newcomer of the Year award as well as the YPN member of the year from the Realtor Association of Sarasota and Manatee.
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anywhere to go. We also know that thereâs been under-building in the new construction sector for probably a decade, which makes it even more complicated. TWIGG: The National Association of Realtors just announced that, nationally, we are four million homes behind where we need to be with new construction in the country. Four million. Thatâs crazy. WHAT DO YOU SEE IN PARTICULAR WITH TOURISM DRIVERS IN THE REAL ESTATE MARKET? DUNCAN: We also are in the vacation rentals market, so I can give you good insight. The impact of tourism is here since we opened back up. Weâre almost solidly booked for May, and rentals are completely booked for June. July is looking busy. Are those people buyers? Yes. Some are, they always are. But we have no supply. If youâre not coming in with clean cash, no contingency, youâre not even in the running. We are seeing some buyers that are coming into the market that are not necessarily looking at buying a home as a vacation rental, maybe using it part of the time, but mainly they ask, âwhat are the rental numbers?â Thatâs all they care about because theyâre not going to use it as their home. There are some buyers [that can afford to compete in this market] looking to relocate their families. I think this pandemic has triggered a whole different mindset, and we have a lot of heads of companies - CEOs, big executives - coming out of the cities. Theyâre moving their families here and can work remotely. We see that, and thatâs great. IâM GOING TO TRANSITION TO COMMERCIAL. WE HEAR A LOT ABOUT INVENTORY AND DEMAND. WHAT IS THE SITUATION FOR THIS SECTOR? DAVID SESSIONS: Initially, the pandemic caused a slowdown in the commercial construction
industry. I think everything shut down in March or April of last year, and then [after a pause], the residential market just took off. However, the commercial market did not. Last year, we probably saw the number of new opportunities for commercial projects probably drop by 30â35%, simply because a lot of people were just hesitant to expand their business. We had a number of projects that were either put on hold or canceled. That was a local distributor here who was very much affected, and I donât blame him. I would have done the same thing. When you look at the commercial office market right now, thereâs still an awful lot of empty offices. The question is, will those offices ever be filled again? Talking to different businesses, a lot of businesses are adapting, and theyâre basically saying that, âYou know what? Why do we need to pay for all of this commercial office space when over the last 12 months, weâve found that we can be just as productive letting people work at home?â Weâre going to start to see a trend of higher vacancy rates in commercial office space. Think about the young family, where youâve got both the mother and the father working. Well, now, what if the mother can stay at home and be just as effective? You donât need to send the kids to daycare. So I think weâre going to see a dramatic shift across the country that is going to redefine really the commercial office. The one area that we see a tremendous amount of activity is the medical office building market. There is a huge demand in this region, and we certainly see that. A lot of those things that were put on hold are now starting to get back online. In Lakewood Ranch, youâve got Waterside Place, which is basically the new restaurant/entertainment district in the Sarasota County part of Lakewood Ranch. That is going to become the prominent restaurant
and entertainment district, by far. The Players Center for Performing Arts is going to open up in a few years. Weâve completed that project. It is done. Weâve been under construction now for the last couple of years. The interesting thing [with the Waterside Place development] is that SMR signed on a number of leases before the pandemic. A lot of them were primarily in the restaurant industry. They didnât cancel. They didnât back out. They just took a wait-and-see approach. Now, all of a sudden, we canât get them open quick enough. So maybe this pentup demand is hitting. The other aspect is that people are moving here at a faster pace than weâve ever seen. The general rule is that the commercial construction industry follows ârooftops.â So with all of these new homes being built, thereâs probably an 18-month lag or so. Youâre going to need new shopping centers, grocery stores, banks, other retail operations, other businesses that are all going to follow. We just took a little pause for nine months or a year, but I see already in the first quarter of this year the number of opportunities for new projects is significantly up. So thatâs the positive part. What is affecting the residential market is that we see the largest increase in the cost of materials that I can ever remember in my career. The only other time we saw this was right before the last Great Recession, probably from 2003 to about 2006. Typically, we get proposals from our subs, electrical, plumbing, air conditioning, steel, and so on. And those are usually good for our clients for about 90 days. Right now, subs and suppliers arenât guaranteeing anything more than 14 days beyond their costs are accelerating at such a significant rate. To put it in very simple terms, six months ago, a sheet of plywood that would go say, on the roof of a house, cost
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$25 per sheet of plywood. Right now, that same sheet of plywood is $65. Take a 2500-square-foot home, for example. Just that one item, the plywood, can add $4,000 to the cost of building that house. That issue is primarily due to shutdowns in Canada. They do the timbering. Then it goes to the mills that produce the two-byfours, the plywood. The Canadian border was shut down, for one, for part of last year. And two, a lot of those manufacturing plants were shut down. And thatâs just one example. We see that across the board, the same thing has happened with steel. The cost of raw material steel since January 1 has gone from $500 a ton to $1200 a ton. That is a huge increase. Now, thatâs just the raw material. The actual cost of a steel beam or a joist or something has still gone up about 30%. Weâve seen huge escalations in copper. Weâve seen it in aluminum. Weâve seen it in all petroleum projects. You canât get certain paints right now because production was slowed down. That was actually a side issue of the freeze in Texas that basically dramatically affected a lot of the manufacturing plants. A lot of the products froze in the pipes, and they actually have to rebuild some of the factories that produce some of this stuff. Itâs going to affect other industries. The cost of steel is going to cause the cost of automobiles to go up. The weak link right now is the microchip shortage. Well, guess what? Thereâs a microchip in just about everything that we do today. It affected us in terms of getting air conditioners. You could get the air conditioner built, but you couldnât get the controls that would operate it because you canât get the microchips. Thatâs the weak link in the automobile industry right now. Weâre going to see shortages because the auto manufacturers canât get certain little components that arenât ramping back up.
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Iâm not getting political, but Florida predominantly was kept open during this pandemic. Whereas so many other parts of the country were just dramatically shut down. So we really donât think of it in those terms, but when we build a building, most of those products arenât manufactured or produced in Florida. Theyâre produced somewhere else in the world, and [the shutdowns in other areas are] hitting us right now. DUNCAN: I agree with David about the property increase and the cost of building going up. I was certainly in the market at that time of the recession as well. Iâve not seen anything quite like this. It was an increase in materials like we are seeing today and not even just your basic construction materials. Right now, I have customers waiting nine months for appliances. They canât get furniture. You canât get foam for your sofas. Iâve had people waiting months and months for their furnitureâjust odd things like that. The increase in the demand is very similar to what it was pre-recession, although this market is a lot healthier from a buyer standpoint. You do not see everything heavily mortgaged, which is a big difference from the great recession. WITH ALL THESE CHANGES IN THE COMMERCIAL MARKET, WHERE ARE YOU TURNING FOR NEW OPPORTUNITIES? BEN GRAHAM: Last year, as everything was shutting down, I did my best to get creative and just try to find ways of staying busy, finding new opportunities. Medical office space, as was indicated just a few minutes ago, is certainly taking off. Itâs ramping up. A lot of industrial manufacturing types of businesses are focusing on the state of Florida. Thereâs a scarcity of that type of product throughout the entire United States, but here specifically on the Gulf Coast, thereâs a
lot of new construction projects happening right now. Iâve got a number of existing properties that are under contract right now, and theyâre flying off the market. The trends that the residential side has been experiencing for the last year or so itâs starting to catch up with commercial. I see a lot of multiple offers on properties that I have publicly for sale. As soon as they hit the market, there just seems to be a lot of activity. The vast majority of it is coming from, I think, out-of-state individuals, business owners, investors. So Iâm excited to see how those trends happen. It doesnât seem to be as volatile as the residential side. I certainly believe that the office market is readjusting very rapidly to the idea that the pandemic may have lead businesses to new ways of working. I think theyâve had to. Iâm not sure what the future looks like. I wish I had a crystal ball, but developers are really prepared and ramping up for life to eventually get back to normal. HUSKEY: The supply-side issues that have been referenced both in real estate and industry are the only governor on how fast weâll run in the future. But I think the demand is sustainable. Some of the aspects that have changed in terms of consumer behavior are lasting. Working from home will be a lasting change. Desirable markets, resort markets, whether it be Sarasota, Naples, our market in Asheville, have now been discovered by a whole new audience. So it isnât just the traditional feeder markets. Weâre now pulling people from western states, et cetera. We havenât even seen the impact of the Canadians or Europeans who have been completely absent from our marketplace. The seasonâs actually extended, and Sarasotas become less seasonal on an annual basis. A secondary wave of potential purchasers may be coming in once there are greater levels of vaccination and more comfort with travel
and other states open up. TWIGG: Theyâve been saying that once a majority of the population is vaccinated, we are going to see a shift. In my personal opinion talking to agents in other states, at Keller Williams, we have a huge referral network. Itâs just crazy to see the flow of people leaving those states, realizing that there might be a greater opportunity for them and their mental health in the state of Florida. If you look at the state of New York, where they still have very strict restrictions, I personally know people there who have been greatly affected by this, and they think that weâre just crazy people here in Florida with being able to just walk outside even without a mask on. You see how itâs mentally affected them, and itâs terribly sad. It actually hurts my heart. So I think that we will see a tremendous influx of people coming here once more vaccinations reach more people in other states. SESSIONS: We have a great climate, a wonderful place to live, and Florida is very tax-friendly. We donât have a state income tax. I think that has a huge effect. New York is just looking to raise taxes to try to make up for the recent shortfall. The taxes in New York are already sky-high, same with California. I think Floridaâs getting the New Yorkers, and I think Texas is getting the Californians. Florida is a very business-friendly state, where certain penalties and restrictions arenât placed on businesses like in other places. In the days when I served on the Economic Development Corporation, and we were meeting with other businesses trying to attract them to come to the state of Florida, we focussed on discussing the whole tax structure from where those businesses were coming from. Switching subjects, I think everybody just wants to get this pandemic in the past. Everybody is looking forward to getting back to normal, to be able to go out, to
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travel, to do everything that you want to do, which really a lot of us in Florida have really been fortunate to do compared to other parts of the country. I mean, itâs just human nature. Humans are designed to be social beings. Weâre also going [even when we can meet in person] to see a lot more virtual meetings than in the past. Itâs actually more productive. You can have a Zoom meeting with ten people from 10 different locations in the country, and youâve just accomplished something in one or two hours that normally would take a couple of days. Iâm very much an optimist with all this. If some of my other comments sounded like gloom and doom with escalation and inflation and lack of production, well, the reality is, we have peaked, and we have valleys. Over time, things just tend to sort themselves out. DUNCAN: For some people, especially in the Northeast, weâre a bargain still to what theyâre used to. We just canât wrap our minds around that. I agree, having no state income tax makes quite a difference in a lot of these buyersâ mindsets. Our property taxes are more reasonable, as is the cost of living overall. To live in an environment that we can enjoy every day and have the freedom to do so, I think that people have gotten a little rattled by losing their right to live as they want. Thatâs why youâre seeing people come here and watching their children thrive here too. YOU ARE AT THE FOREFRONT OF ENGAGING WITH NEWCOMERS TO THE REGION. THERE IS A CONCERN THAT THIS INFLUX OF PEOPLE MIGHT CHANGE OUR CULTURE TOO MUCH OR TOO RAPIDLY. WHAT DO YOU SEE? GRAHAM: I certainly hope that when new people enter the state of Florida, that they embrace Florida life. Theyâre moving here for specific reasons, and I hope that stays in the forefront as they
settle into whatever community it is that theyâre moving to. That is always the fear, I think, with folks that reside here. I was fortunate enough to do some traveling last year, and going to other places in the United States, specifically up in the Northeast, I felt like I was in a different country. And then, coming back to what I consider to be paradise here in Sarasota, it was just such a breath of fresh air. And thereâs a lot that I would do to maintain that and ensure that that stays the way it is. It is paradise, and I really hope that resonates with new residents in the state of Florida. There are folks that I have talked to that are coming from California, from Texas, Illinois, Canada, the Northeast specifically. And from what they have told me, it really does seem like they want to just assimilate into Florida and really enjoy that type of lifestyle and just kick the dust off their heels once they cross the border. HUSKEY: Itâs true in Sarasota, in Naples, that while weâll continue to have a great demand of seasonal residents, theyâre going to be the minority. The new flood of people is coming here to establish roots, not just coming here to play. It is going to be somewhat of an interesting impact on whatâs going to happen in the future. We do have to really approach things a little bit differently from a design standpoint and a perspective on how weâre going to look at development. And this is one area where I think Sarasotaâs probably done a very good job, is itâs been very friendly in terms of how it perceived the downtown area. Inevitably, youâre going to have to increase density, and that comes with its own set of challenges regarding the underlying infrastructure needs and the revenues needed to pay for it. Ultimately, youâre going to have to be more accepting of more of an urban type of environment, a denser environment. Thereâs a limited
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amount of developable land, and we can only go so far east. SESSIONS: I would agree with Budge on the density issue. Weâve seen in the past, and our elected officials fight that. And the reality is that it just creates unnecessary urban sprawl. Density is not a bad thing, and if we really want to preserve a lot of the natural land of Florida, weâve got to quit paving over it. The only way that we can do that is to look to densify certain areas. There are places where it makes sense, like, downtown Sarasota, perhaps downtown Bradenton. And there are obviously certain areas where it does not make a lot of sense because it would change the culture of that community. Iâve been in Florida for most of my life and, coming from somebody whoâs in the building industry, Iâve seen a lot of it paved over. Iâve seen a lot of the environment destroyed. Thatâs depressing. Iâm not a developer, but Iâm a builder. We benefit from it, but thereâs a good part of me thatâs very green, thatâs very sustainable, thatâs an environmentalist. Densifying selected regions to give a young professional group more of that urban lifestyle experience is a direction that we need to go in. HUSKEY: Itâs really the only way to make it available to a larger audience. We know housing affordability is a critical issue right now, and it will be regardless of what direction we go. The only way to make it more affordable is to go denser, so youâre not having the same level of land cost per unit. DUNCAN: Affordable housing has always been something that was at the forefront for me in my business over the years. David and I have been very involved with our Manatee Chamber of Commerce, where we had an affordable housing initiative that we still are working on, which is huge in our area. Affordable housing needs to be centrally located, or you get sprawl. If you move affordable housing so far away, then
you have traffic issues throughout the whole county. Then you have companies here trying to hire people, but they canât because the people drive through the traffic to get to the jobs. As far as density on our islands, the ship has sailed. We donât have infrastructure that can stand the impact of the construction thatâs going on, the drainage issues, stormwater retention, all those things-- the roads canât handle more, the sewers canât handle more. WHAT SHIFTS HAVE WE SEEN IN THE RESIDENTIAL MARKET? TWIGG: A lot of my buyers are shifting towards new construction. Sky Ranch, Worthington. A lot are realizing or thinking, âwhy would I buy a single-family existing home when I could go to a new construction community, customize it to what I want, and pay the same price?â And then they are going to a rental for a year while the home is being built. With the new construction, every single person is on a waitlist. Theyâre going to the highest and best offers for lots. The Waterside, Hidden Creek area, Founderâs Club out Lorraine, and Sky Ranch are huge right now. And at the same time, people really want to go back west of the trail near Siesta Key. Also, people want to be closer to downtown Gillespie Park, Laurel Park, Grenada Park, Cherokee Park. WHAT ABOUT THE PRESSURES DAVID WAS TALKING ABOUT IN TERMS OF THE COST OF NEW CONSTRUCTION? TWIGG: I have a client whoâs working with a builder, Taylor Morrison, and last night, we got a text at 5:30 that just said, âWe just did a significant price increase. This might affect your build.â That was last night at 5:30 pm. And within 10 minutes of us getting that text from the sales rep at Taylor Morrison, they already changed the price on the website, and I mean, it did signif-
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icantly increase. These increases are going to push people into existing homes. HUSKEY: I agree with Alexandria, you move further east, and thatâs where you have the land for new construction, but the density has to come downtown. The other thing that I anticipate seeing a lot more in Sarasota is that probably a third of the homes that are in these desirable communities were built in the 50s and 60s; theyâre all tear-downs. Every single one of them is gone. The value of the lots now are ranging from a million to a million and a half, and then people are tearing them down and building three to five million dollar homes or more. Weâre only now beginning to see the tip of the iceberg of that occurring in Sarasota, west of 41. It is going to be the future here in the coming years. TWIGG: If you go out into Sarasota outside of the city, there is nothing like Waterside that exists. Maybe you have Gulfgate, which is a much older shopping area, but you donât have a community-style or a community feature at the center. Thatâs only downtown, Main Street area, Pineapple. So, I think that as Waterside develops, Fruitville is booming. As that continues, that area and that part of town will greatly increase with their density. Look at all the apartments going up. DAVID, YOU BUILD BIG SUPPORT SERVICES, ARE THOSE PROJECTS BEING PLANNED NOW TO ACCOMMODATE THIS GROWTH? SESSIONS: After a year of decreased activity, we saw this yearâs acceleration in the number of opportunities that we had compared to last year. Thatâs turning into sales, and itâs turning into new projects. The schools, both Sarasota and Manatee school districts, really do a great job. They study these new subdivisions, and they calculate how many kids were going into ele-
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SRQ M AGAZ I NE RE GIONAL RE AL E STAT E I NSIGH T S : : SUMME R 2021
mentary, middle, and high schools are going to come out of those subdivisions. At the beginning of each year, they carefully count the number of new students to measure against what their projections are. Colleges and universities do the same thing, although theyâre adjusting more to online learning. And we see a lot of other commercial activity; as I said, the medical office building category just seems to be going like crazy right now. WHAT ABOUT COMMERCIAL GROWTH? WHERE IS IT APPEARING? GRAHAM: Given the influx of folks moving to the state, they are always going to bring new ideas, new directions in businesses, and I see that a good bit. Iâve been focusing a lot on South County, Venice, Englewood and parts of Charlotte County. And I really feel like that is the trend, where Sarasota is expanding, itâs going that way, and you see the growth coming up from Naples and Fort Meyers. You have these pockets that are still very much green, but it could be pavement tomorrow. I see this every time I drive down River Road into Englewood; there are new developments coming in each month. I believe that new businesses are focused on certain areas that perhaps they may not have in the past, and thatâs just because the price point is more attractive to them. Thereâs opportunity in those outlying areas that people should be paying attention to. EVERYONE ALWAYS WANTS TO KNOW WHATâS NEXT. WHAT DO EACH OF YOU SEE? TWIGG: You look at the fiscal trends, and what goes up must come down. The pendulum is definitely swinging upwards, and we just really never know when weâre going to hit the top. One day, we will wake up, and we will know when we have hit the top because the next day, we will be on a downward spiral. I
just really think for the consumer who is reading the magazine, who is thinking about selling their home or thinking about buying a new home, realistically, itâs a great time. You are actually netting the most amount of money and receiving top dollar, or you are getting a phenomenal interest rate. Itâs a great time to get into the house and the real estate market. DUNCAN: Unfortunately, my crystal ball has got a big crack in it. God isnât making any more waterfront property, and everybody wants to be on the coast. We have a lot of pent-up demand right now at this moment in time. Youâve got a lot of people that havenât been able to do anything for a while. I certainly donât see any diminishing demand for people wanting to come to beautiful beaches in a beautiful place where they can live all year round outside, in a healthy environment, both mentally and physically. I think that Iâd like to see some nice new inventory come on the market to take off the pressure and end the budding wars, more balance. I think that the vacation rental business will stay strong as well. The future looks very bright, and weâve got a lot of good people and a lot of good places to make great things happen in our community. Letâs keep on trucking. HUSKEY: I donât like to use the term boom because it implies a bust. I was around during the last one, and that truly was terrible, but this is real people, real demand, real money, real desirability to the market. Weâre not going to be able to sustain the same pace of sales that weâve had in probably the last six to nine months, but the demand is going to continue to be there. I see values being permanently reset in the Sarasota market in the new construction and resale. I believe that we are going to increasingly become more like some other areas of the country, and whether thatâs a good thing or
not, you could argue. Increasingly though, if you want to live here, youâre going to have to have the economic means to do so because thatâs the realities of supply and demand and the market forces that are currently in play. GRAHAM: Iâm cautiously optimistic. The influx of businesses that are focused on the Florida market, I think, creates a great amount of opportunity and future growth. I love working with small businesses. They are the backbone of every community. I think property owners, landlords, tenants, theyâve all had to shift and make adjustments and get creative and innovative. I think the future six to 12 months should be very exciting, and I look forward to working with businesses that are moving to the area want to enhance the market, flourish and grow, and provide a service that everyone can use and utilize. SESSIONS: The impact of increased materials costs is a short-term issue. Weâve experienced some of this before. Production and manufacturing are going to get back to normal worldwide, and these issues are going to be past us. I donât know how long, three months, six months, nine months, but itâs just a little bump a the moment. The cost escalation issues are also going to normalize. One thing, as relates to the residential market, is that with the one exception of the Great Recession, prices historically, year over year, have never gone down. I fully suspect a year from now, and the pricing will normalize. With regard to the demand for commercial construction, weâve seen a tremendous amount of residential growth, and as a result, the commercial construction market is going to be doing quite well for the next several years. Floridaâs a very desirable place. Iâm very optimistic about the future. SRQ