Keeping it Real: January

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New construction surge packs a punch

By Natalie Gutwein

Happy New Year! Can you believe it’s already 2024?

Time seems to be flying since the pandemic, and changes are happening rapidly — especially here on the Key. Who knows what’s going to happen with all the proposed hotel projects, what’s going into the Davidson’s building, or how Benderson seems to always get a yes to anything for which it asks. Nevertheless, these developments significantly impact the lifestyle of residents and visitors on the Key.
Those aren’t the only changes. One of the most notable changes is the surge in new construction across the island. This is a function of a few different factors: Once a home has deteriorated past a certain point, the FEMA 50% rule prevents unlimited renovations to a property.
As a reminder, FEMA regulations on homes in flood zones that are below base flood elevation limit renovations to 50% of the value of the improvements. The value of the improvements is determined by the Sarasota County property appraiser and is listed on that website as the “improved value.” This dictates the maximum allowable renovation cost.
For example, if the improved value is listed as $100,000, the homeowner is only allowed to invest $50,000 into renovating the home. This policy was designed to encourage homes to be built above base flood elevation, and it seems to be working.
The other very obvious factor is value. Property values have increased so significantly over the last few years, thus making the lot value of our properties so high, many longtime residents with older homes have chosen to sell their houses to builders. For instance, a canal-front tear-down at 4838 Higel Avenue sold for $1.5 million in September to a local builder. That same home was briefly listed for sale in August 2020 at $699,999 but didn’t sell.
Similarly, the canal-front home at 540 Givens St., at the corner of Givens Street and Higel Avenue — also a teardown — sold for $1.45 million in September.
There has been similar activity in other areas of the Key as well. The canal-front home on a double lot at 5300 Avenida Del Mare was purchased in April of 2022 for $1.975 million. The original home was built in 1954. It was demolished, and two homes are being built on the property. The new builds are priced at $4.250 million and $4.5 million.
On the north end of the Key, the homes/lots at 3722 Flamingo Ave. and 3550 Flamingo Ave. sold for $1.95 million each. The new home at 3722 is currently listed at $6.75 million and is due to be completed in the next couple months.
As of the date of this writing (Dec. 8), there are 19 single-family new construction homes listed on Siesta Key and that number doesn’t include several of the recent lot purchases where new homes are slated to be constructed. Fourteen of the 19 new homes listed are over $3 million, with the highest current price at $8.95 million. There are also 18 lots currently listed for sale.
The island is undergoing significant transformations with many older homes being replaced by newer, hurricane-resistant structures, contributing to the continual rise in the average sales price. While this has advantages for existing property owners that may eventually cash in on the equity in their homes, prospective buyers face the challenge of higher costs for new construction.
However, there are still many existing homes available with a much lower price tag. The evolving landscape brings anticipation and curiosity for what lies ahead.
Stay sunny, Siesta!

(Natalie Gutwein is a licensed Realtor with Premier Sotheby’s International Realty’s Judie Berger Team and a member of the board of directors of the Siesta Key Association.)
(Data accurate as of Dec. 8 from Stellar MLS.)

John Morton
Author: John Morton

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