SARASOTA, Fla. -- A new study reveals that cash reigns king when it comes to real estate in the state of Florida, and Sarasota ranks in the top 5 cities in the nation with the most cash sales of homes.
With miles of beautiful beaches, countless amenities and culture that Sarasota has to offer, it comes as no surprise to visitors and realtors alike that cash sales are driving the market.
"I'm not surprised at all,” says visitor Richard Medeiros of Mount Dora, Fla. “You've got good beaches, the people are friendly, it's a real nice area."
According to Realty Trac, nearly two-thirds of housing sales in the state of Florida in the first quarter of this year were done in cash. In Sarasota the number was higher -- 65 percent. Both figures are well above the national average of 42.7 percent.
"You're getting a much more solid buyer and that's what the seller wants,” says Coldwell Banker broker Roger Pettingell.
Two factors are driving cash sales -- banks are still strict on lending making it more difficult for buyers to get a mortgage and an inventory shortage, creating more competition.
"When you look at somebody retiring and accumulating their wealth through the course of their life, they're not interested in adding more debt," Pettingell says.
While investment companies are quick to buy property with cash, realtors say the Suncosat market is unique, attracting snowbirds seeking second homes, baby boomers, and international buyers -- most of whom have cash on hand.
One Longboat Key condo just closed at more than $4 million cash, sold to buyers looking to escape the cold northern winters.
"It's a methodology of buying, I think what's good for Sarasota is that people are buying and that prices are going up," says Coldwell Banker broker Bob Stanley.
Realtors say foreclosures and short sales are diminishing in Sarasota, and homes are starting to appreciate. But for buyers dependent on financing, they may face more stumbling blocks from lenders, due to strict mortgage underwriting standards.
To make matters worse, Sarasota realtors are expecting an even greater increase in cash sales in the coming year, as more northern residents make the move to Sarasota due to this past year's severe winter up north.