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The year 2021 saw massive rises in prices on residential and commercial real estate as out-of-state buyers rushed to Florida. But as the new year comes, wonder remains how long the rush will last— and how it will ultimately end.

Ben Bakker, a Realtor at Michael Saunders & Company and 2022 president of the Realtor Association of Sarasota and Manatee’s Commercial Real Estate Alliance, doesn’t expect the market to slow down soon. “We will still see a relatively strong 2022,” he says. “The multiple factors created this fortunate and positive perfect storm for the commercial and residential market, and we still haven’t finished going through those.”

Early 2021 saw a migration of investment from around the country as people and businesses relocated to Florida. While Bakker expects that to slow down, it will likely be replaced with international activity as borders reopen to travel. Many will choose to move to Florida, and more will choose to invest in property here. 

“It will keep momentum really solid,” he predicts. “At worst, we will be slowly plateauing to a normal market.”

The endgame of this rush may preoccupy the thoughts of those who recall the housing burst at the start of the Great Recession in 2008. The last couple months, RASM reported a reduction in number of closings as prices rose. Will this boom end in a crash as well? Bakker doesn’t see that happening.

“From my own personal experience day-to-day with an influx of phone calls, I just don’t foresee it slowing down much anytime soon,” he says. “We are just dealing with a real supply and demand issue. There is not enough inventory to satisfy what the buyers are needing, and we can’t build fast enough thanks to lingering supply chain issues.”

Should material supply and property inventory become ample again, prices will likely stop escalating so rapidly. But neither will they collapse.

Another concern, particularly as businesses consider locating in the region, may be an affordable housing problem. But on that front, Bakker believes the region doesn’t face any greater challenge than other markets in the country.

“America in general has an affordable housing problem overall,” he said. “It’s not just local. In all four corners of the country, we’re dealing with this problem. We need workforce affordable housing at affordable rates and with an affordable inventory just as much as any place in America.”

Locally, RASM has actively involved itself in seeking solutions. Bakker also feels hopeful that Gov. Ron DeSantis in his proposed budget sets aside funding to address the challenge, and that last year the state for the first time in years left a Sadowski Trust Fund intended to supplement affordable housing in place. The Legislature in the past has swept the fund to offset various budget crises from loss in tax revenue during the recession to funding hurricane recovery or implementing school safety measures.

“To me it’s a no-brainer. Let’s keep the Sadowski fund intact year after year,” he said. “Just keep your hands off of it for five years. We really don’t know how successful it can be because no one has left it alone long enough to see what it can do.”

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