Florida has always been a popular destination for vacationers and retirees. In 2020 and 2021, the state became even more desirable, thanks to a strong housing market and a relatively loose “open for business” approach to the COVID-19 pandemic.

Within the state of Florida, cities along the Gulf Coast have garnered some much-deserved attention as some of the Nation’s most desirable places to live, work, and play—none more than Sarasota.

Recent accolades like the #1 Place to Retire (US News and World Report) and #1 Beach in the America (Trip Advisor) have only made Sarasota more popular among the masses of Americans looking to relocate in the wake of the Pandemic.

Not surprisingly, the housing market is red-hot. Average listing prices are up more than 10% across Sarasota’s best neighborhoods, with many closing in just weeks.

As we look toward the end of 2021 and the beginning of a new year, we have to wonder: Where does the market go from here?

Here are insights gathered from this month’s National Association of REALTORS® Power Broker Roundtable, originally published by rismedia.com.

Nationwide, Housing Markets Are Cooling

Speaking on the coastal Maryland market, Cindy Ariosa says “the price peak driven by pandemic buying [is] over.”

There are many indicators to look at, like pending sales and requests to see newly listed homes. By both measures, the Maryland market seems to have cooled. Year over year, fewer homes are “pending sale” compared to the peak of the Pandemic. And although requests to see new listings have tapered off, they aren’t “calamitous in the scope of things.”

On the other side of the country, brokers are experiencing a similar cooling effect. According to Bay Area broker Jeff Barnett, San Francisco is experiencing a “typical summer slowdown.” Still, Barnett optimistically calls the market robust. One reason: The condo market is rebounding from Pandemic-lows.

In the Sunshine State, brokers are seeing similar housing market trends.

Sarasota Housing Market Shows Signs of Strength

Homes in strong markets, like Sarasota, tend to naturally appreciate in value. And while the Pandemic fueled a shortage that spiked prices, homes are relatively in-line with where they would have naturally appreciated to (see analysis below).

Both domestic and international travel are getting easier. As restrictions lift, potential buyers can more easily travel to view properties in person. This should keep demand steady, as those who were hesitant to buy something sight unseen a year ago can receive a proper tour today.

This is especially important in regions like South Florida and the Gulf Coast, where potential Buyers are accustomed to visiting from out of state (and out of country) to tour prospective homes.

Buyers are continuing to enter the market, especially in Florida. On the one hand, many families and young professionals are relocating from bigger cities in the West and Northeast to smaller and less restrictive locales in states like Florida. In addition, Millennials are increasingly buying homes— especially in the Sarasota neighborhoods like Longboat Key, Payne Park Village, and Southgate.

Related: Find homes in Longboat Key.

Related: Find homes in Payne Park.

Related: Find homes in Southgate.

Nationwide, We’re Seeing a Different Story Compared to the 2008 Financial Crisis

Today’s housing market is fundamentally different from the market that preceded the 2008 Financial Crisis. The latter was a combination of unique and absurd conditions. Let’s recap:

Countless mortgages were issued to under-qualified homeowners. Those mortgages were packaged as securities. Those securities, collateralized. Piece by piece, subprime mortgage by subprime mortgage, the housing market was quickly transformed into a house of cards. And when the lowest quality mortgages defaulted, the first floor of cards flattened. In a matter of months, the entire scheme collapsed.

Today, things look very different. Mortgage reform has made it extremely difficult to create subprime loans. Instead of being driven by “free money” and a thirst for overextension, today’s buyers are looking for new lives in new locales.

Moreover, it seems inflated home prices are being driven by supply and cost issues. The Pandemic caused major delays in global supply chains, which has made it very difficult to build new homes and condos. Popular cities and suburbs have churned through existing inventory at unprecedented speeds.

Scarcity was created from both ends, which is why experts believe the market will level off once supply chains are straightened out and the cost of materials comes back down.

Prices Appear to Have Appreciated Naturally

“When you account for natural appreciation, though—say since the year 2000, prices today are not far off from where they would have been at this point, pandemic or no,” explains Drayton Saunders, President of Michael Saunders & Company Real Estate. “And remember that in addition to all those folks who want to move, there’s a whole new, younger demographic out there who are just now ready to buy a home.”

And that’s great news for anyone looking to find their dream home in Sarasota.

Get to Know the Neighborhood

Visit our guide to learn more about the best neighborhoods in Sarasota!