Despite Mortgage Crunch, Sarasota Builders Keep Builidng
Posted June 27, 2007
In a recent Wall Street Journal article it was pointed out that apparently private investors don't mind the risk, and buyers continue to want to own a piece of the Sarasota real estate market even though the mortgage market keeps gets thinner and thinner.
The current subprime lending market debacle is scary with projections of over a $ trillion in losses from mortgage defaults. But, it is pointed out that inspite of the subprime market weakness, the fundamentals of the Sarasota real estate market are still
relatively strong, including favorable interest-rates, employment and income growth, and, thanks to price reductions and sales incentives offered by local builders, the new home market in Sarasota is realtively healthy.
Thinner demand across the overall housing market in the United States caused by more limited mortgage availability due to tougher lending standards may strain the profitability of some builders of new homes. Some
estimate from 5% - 15% reductions in overall new home demand. As a result, in Sarasota, some new home builders may have to go
up-market from the markets they now serve to find buyers with the required financial assets to qualify. But Sarasota Florida has one great advantage over other real estate markets. One of those old real estate proverbs, "location, location, location" works to
local builders' advantage.,/p>
"People by the thousands want to live in Sarasota Florida with its gorgeous climate and its many cultural and recreational amenities," according to Judie Berger of Sky Sotheby's Realty. "And to do that, we need to keep building homes. Its that simple."
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