"I'm only interested in short sales and foreclosures"

We Realtors hear it from many buyers.

"We are only interested in short sales and foreclosures"

The problem with only looking at the distressed properties is that you are ignoring more than half the market. So far in 2010, there has been 14,045 properties (WOW, THAT IS AWESOME!) sold in Sarasota and Manatee counties per our Mid-Florida MLS system. Of those sales 6,198 of them were short sales or foreclosures which constitutes 44% of the market. 

As you can see there a whole bunch of properties selling that are not bank owned or short sales. If you are a home buyer and want the best selection of homes then you should look at everything and not just the distressed ones. 

Another interesting statistic is that of the 6,198 distressed properties that sold in 2010, 5,419 of them or 88% were below $250,000. So if your price range is above $250,000 then you really don't have much to look at if you limit yourself to the bank owned and short sales.

10 Popular Sarasota Neighborhoods

Below are 10 popular neighborhoods in Sarasota with how many houses are for sale and how many of those homes are distressed.

As you can see the more expensive the neighborhood (Bird Key and Casey Key) the less likely you are to find a distressed sale.

A Rising Tide Lifts All Boats

All homes have dropped in value with this real estate correction. Some neighborhoods and homes have dropped more than others. On a percentage basis a home in Gulf Gate has dropped more than a home on Longboat Key. 

The Sarasota real estate market will bottom and start to appreciate. In theory, any home you buy will go up with the market. Regardless, if it is a short sale, bank owned or home sold by a regular seller.

Hypothetically, let's say you are trying to decide between 2 homes in the same neighborhood. House 1 is priced at $410,000 and you describe it as "It works". House 2 is $460,000 and you describe it as "I love it". The first home is a bank owned home and the second home is being sold by a regular seller. 

Your friends, relatives and the media have ingrained in your head that you should be buying a bank owned home or a short sale because they are better deals. However, in reality, that is not always the case. You can find a good home that is priced well that has a regular seller.

Assuming all boats rise with the tide both houses will move together with the market. See the chart below. Assume the market drops 5% in 2011, bottoms out and then appreciates 3% a year for the next 9 years. In 2021, House 1 (It works) will be worth just over $508,000 while House 2 (I love it) will be worth just over $570,000. Both homes are going to rise with the market (assuming the market rises). The big difference here is that you spend 10 years in an "I love it" home instead of the "It works" home.

Conclusion

If you are a home buyer you should really look at all homes and don't limit your options. You can find a great home with a regular seller that is realistic about the market. Keep an open mind, look at all types of properties and determine value by the home you get at what it will cost. Not on whether or not it has been labeled "distressed".