Message From The Publisher

It comes as no surprise that the number of real estate closings on Anna Maria Island in September ‘04 was down from the same period last year. September is traditionally a slow month for sales on the island but when three hurricanes scare the bejesus out of everyone, the last thought is buying or selling property. Even the transactions ready to close were held up by insurance policy suspension periods.

How will this unusual weather activity affect the real estate market in the long term? No one has a crystal ball but the people we are talking to feel 2005 will be another banner year in the number of sales as well as a continuation of solid appreciation in property values. Interest rates are not expected to rise sharply and there does not seem to be any shortage of investors, especially in the under $500,000 price range.

Savvy investors for the most part are looking for properties that fit a formula based on the Gross Rent Multiplier. Current sellers of island investment properties are setting prices at an approximate Gross Rent Multiplier of about 20. That means a property generating $20,000 annual gross income would have an asking price of $400,000. Unfortunately, it would be impossible to come close to covering the expenses of ownership using this formula but this has been the case for many years. There are other factors such as property condition and age, location or supply and demand that add or subtract from this calculation. If the buyer plans to use the property for part of the year they may be willing to pay more but then the income drops ever further.

But why are investors still buying island property at such a feverish pace? The obvious answers are appreciation, low interest rates creative tax stategies and the love of the island. Let’s say the $400,000 property above is costing the owner $20,000. annually to own. In five years, due to increase rental rates and other factors, the property is breaking even. The cost of ownership is about $50,000. If the appreciation rate is half of the 25% we have enjoyed over the last five years, the same property would bring $750,000. in a sale. That calculates to a $200,000 profit in five years.

Analyzing this further, there are several new beachfront condos on the market for around $1,600,000. They average 2000 square feet and offer three bedrooms and three bathrooms, large pool, garage parking, luxury amenities and a great view. ($800./SF). Using the same GRM formula the condo would have to generate $80,000. annually to be a fair deal. If the unit is rented 30 weeks as it should, the weekly rate would have to be $2,666. Currently the rental market on the island would not justify this rate. The highest rate on any beach front rental is about $2,200. weekly. In this case the Gross Rate Multiplier is about 25. What makes these attractive investments is the new contruction built to new hurricane codes, state-of-the-art beautiful designs, long life with low maintenance and the fact that there is only so much beach and beachfront property is always desirable both for rentals and for resales. Buyers able to afford these prices usually plans to use these units personally and are willing to pay extra for top quality and location.

Some smaller beachfront properties that may appear on the surface to be way overpriced could ultimately be the best deals. The Beach House Resort at 1000 Gulf Drive North in Bradenton Beach is being completely gutted and refurbished. The units are being sold completely furnished and ready for occupancy right down to the sheets and dishes. The purchase prices range for $425,000 to $445,000. These one-bedroom units are only about 480-500 square feet making them appear to be the most expensive per square foot on the island, about $925./SF. One would expect investors to run the other way but if you look at the Gross Rent Multiplier calculation they are in fact one of the best deals around. The units will rent for $1000. per week for about 30 weeks the first year and 40 in the second year because of on-site resort-style, rental management and the fact that they are DIRECTLY on the beach and $1000. is affordable for a greater percentage of the rental demographic. There are very few direct beach front rentals for $1000. a week. This units are expected to break even in year two and have a solid rental income stream thereafter. Interestingly, these units with have a GRM of about 12 making it one of the best investments on the island!

As the saying goes, things are not always as they appear. The key to finding the best deals is to work with a professional real estate agent qualified to find all the factors which identify true value.

In addition to devastating communities throughout Florida in September, hurricanes Frances, Ivan and Jeanne left their mark on Anna Maria Island in terms of lower sales in all categories tracked by AMIPSR.

Total sales for September 2004 were $12,151,490, down from $19,206,900 in August ‘04 and off 51% from September 2003, when total sales came in at $18,364,750.

* Single family residence sales dropped to $5,397,490 from $7,122,650 in September 2003. Average sales price on ten sales this year was $539,752, off from $547,896 a year earlier when 13 single family residence sales closed.

* Condo sales were $2,349,000 in September 2004 versus $5,834,000 in September ‘03.

* Sales of duplexes and triplexes were $2,515,000 September 2004, down from $5,168,100 a year earlier. Average sales price rose dramatically, however, from $516,810 in September ‘03 (ten sales) to $628,750 this September (four sales).

* Commercial property sales were a bright spot in the September 2004 picture, when three sales generated $2,240,000. In September 2003, four commercial sales totaled $1,890,000.

Third Quarter Single Family Home Sales Up

Buoyed by strong results in July and August, however, third quarter sales of single family residences rose in all categories. Third quarter sales this year were $33,688,522, an average of $672,051.92 on 52 sales. Third quarter 2003 single family residence sales came in at $23,996,200, an average price of $579,331.82 on 44 sales.

Condo sales in the third quarter of 2004 were also up as was the average price per condo, with 26 sales generating a total of $10,017,900, an average of $385,300. In third quarter 2003, the sale of 35 condos generated $8,182,000, an average of $230,914.

Duplex and triplex sales in the third quarter of 2004 totaled $2,515,000 versus sales of $5,157,500 in third quarter 2003. Again, the average sales price in this year’s third quarter was dramatically higher than last year, $643,450 versus $515,570 in the third quarter of 2003.

There were three commercial sales in third quarter 2004, generating total revenue of $2,240,000 or an average of $746,666.67. In the third quarter of 2003, eight commercial sales generated $8,831,900, with the average $1.1 million per sale.

Inventory Higher Now Than During Summer Months

The inventory of property for sale on Anna Maria Island is up from what it was in the summer months, when it settled around 170 give or take a property or two. At press time for AMIPSR, there were 78 active single family residence listings, along with 90 listings for condos, 24 for duplexes and triplexes and eight for commercial property, making a total of 200 properties on the market. A month ago, that number was 169.

$2+ Million Properties Increase

The September issue of AMIPSR mentioned a new wrinkle in property sales on Anna Maria Island: listings at $2 million and over. There are currently eight properties in this category, although one is a double listing.

The list includes six properties listed in last month’s issue:

Three units at the Villa Rosa, each on the market for $2.5 million;
538 68th St., Holmes Beach, $2,349,000;
2318 Gulf Drive, Bradenton Beach, $3,000,000 (actually the Casa Marina Resort, a commercial property);
2510 Gulf Drive, Bradenton Beach, $2 million
New to the list is a duplex at 2500 North Gulf Drive, Bradenton Beach, listed at $2,450,000.

The property at 2318 Gulf Drive is now listed as both residential and commercial

Anna Maria Island Residential Properties Sold Sept. 1-Oct. 1, 2004

110 31st St., Ilexhurst, Holmes Beach, 2BR/1BA, fourth house from the beach, drive space, 1224 sq. ft. Built 1920…$390,022.

3003 Avenue C, Ilexhurst, Holmes Beach, 2BR/2BA, attached garage + drive space, overlooks nature preserve, 1,040 sq. ft. Built 1979…$399,000. (Mel Neely, Island Vacation Properties)

6605 Gulf Drive, West Wind Shores, Holmes Beach, 2BR/1BA, attached carport + drive space, gulf front/no beach. Built 1955…$399,000.

224 84th St., Holmes Beach, 2BR/1BA, attached garage, deeded boat slip with home, 1362 sq. ft. Built: 1960…$420,000.

2906 Avenue C, Ilexhurst, Holmes Beach, 2BR/2BA, attached carport + drive space, 1835 sq. ft. Built 1982…$430,000.

303 74th St., Bay Palms, Holmes Beach, 3BR/3BA, attached garage + drive space, private deeded boat dock, 1912 sq. ft. Built 1975…$499,500.

3610 Gulf Drive, Casanas, Holmes Beach, 3BR/2BA, attached garage, west of Gulf Drive, 1150 sq. ft. Built 1998…$500,000.

662 Key Royale Drive, Key Royale, Holmes Beach, 4BR/3.5BA, inground pool, attached garage + drive space, community boat ramp, partial bay view, 3300 sq. ft. Built 1970…$750,000.

505 58th St., Bay Beach, Holmes Beach, 5BR/5.5 BA, inground pool, private dock, partial bay view, 3,579 sq. ft. Built 2000…$955,000.

108 8th St. South, Cortez Beach, Bradenton Beach, 2BR/2BA. drive space, heated pool + community dock,1428 sq.. ft. Built 1920…$455,000.

Anna Maria Island Condos Sold Sept. 1-Oct. 1, 2004

522 Pine Ave. #1-A, Bayou, Anna Maria, 2BR/1BA, dock, canal and bay views, deeded boat slip, 822 sq. ft . Built 1973…$275,000.

3607 East Bay Drive #111. Sandy Pointe, Holmes Beach, 2BR/2BA, attached carport, 1,040 sq. ft. Built 1996…$200,000.

5200 Gulf Drive #102, Martinique South, Holmes Beach, 1BR/1BA, full gulf view, heated pool, detached carport, 832 sq. ft. Built 1970…$435,000.

1303 Gulf Drive #3, Bradenton Beach, 1BR/1BA, full gulf view, 556 sq. ft. Built 1971…$279,000.

1801 North Gulf Drive #117, Runaway Bay, 1BR/1BA, lake view, near pool and clubhouse, 691 sq. ft. Built 1978…$280,000.

2502 Gulf Drive #110, Club Bamboo, Bradenton Beach, 1BR/1BA, heated pool, deeded beach access, 620 sq. ft. Built 1975…$330,000.

501 North Gulf Drive #201, Bridgeport, Bradenton Beach, end unit with direct gulf front views, heated pool, attached carport,, 1500 sq. ft. Built 1982…$550,000.

Anna Maria Island Duplexes Sold Sept. 1-Oct. 1, 2004

306 72nd St., Bay Palms, Holmes Beach, living room-kitchen + living room-kitchen, 1680 sq. ft.. Built 1977…$470,000.

205 75th St., Trade Winds, Holmes Beach, living room-kitchen + living room-kitchen, remodeled, private patio for each unit, 1536 sq. ft. Built 1963…$575,000.

502 68th St., Holmes Beach, 2BR/2BA + 2BR/2BA, tropical pool with landscaping, 1340 sq. ft. . Built 1977…$635,000. (Mel Neely, Island Vacation Properties)

110 81st St., Holmes Beach, laundry room/living room/Florida room + living room/Florida room, 1/2 block from beach. 2365 sq. ft. Built 1958…$740,000.

101 South 7th St., Cortez Beach, Bradenton Beach, living room/dining room + porch/living room/dining room, full gulf view. 2028 sq. ft. Built 1949…$730,000. (Ted Schlegel, Island Vacation Properties)

Anna Maria Island Commercial Sales Sept. 1-Oct. 1, 2004

10010 Gulf Drive, Anna Maria, 1,550 sq. ft. under roof in coastal style building with C-1 zoning. Formerly Beach Style Boutique, now White Egret Boutique. $540,000.

301 Manatee Ave., Holmes Beach, corner vacant lot 100 ft. on Manatee & 55 ft. on Gulf Drive across from public beach. $200,000.

107 South 8th St., Bradenton Beach, four building complex with boat dock, steps from beach. $1,500,000.

Anna Maria Island Property Sales Report is published in cooperation with Island Vacation Properties, LLC, 3001 Gulf Drive, Holmes Beach. The following represents the property sales activity of IVP in September 2004.

Island Vacation Properties Active Listings, September 2004

2801 Gulf Drive, Bradenton Beach, 3BR/2BA, partial gulf view, corner lot, two car attached garage, heated in-ground pool, $699,999. (Ed Kirn)

3805 East Bay Drive #305, Sunbow Bay, Holmes Beach, 2BR/2BA, turnkey furnished, heated pool, community boat dock, attached garage. Built 1979…$330,000. (Mel Neely)

517 Magnolia Ave., Anna Maria, 4BR/3BA, almost brand new pool, bay views from all decks, dock. Built 1992…$868,000. (Ted Schlegel/Barry Gould)

1000 Gulf Drive, Unit 10, Beach House Resort Condominiums, Bradenton Beach. 4BR/3BA 2000+ sq. ft. unit, direct beachfront with unobstructed views of the gulf, $1,500,000. Final design pending regulatory approvals. Subject to change. (Barry Gould/Ted Schlegel)

NOTE: Several nice gulf front and gulf view condos for under $500,000. will be coming available soon Call Island Vacation Properties for details.

Island Vacation Properties Sales Listings Under Contract

202 Lakeview Drive, Anna Maria, 2BR/2BA, two-car garage (room for four cars), on canal, corner lot, $612,000. (Mel Neely)

100, 102, 104, 106, 108 36th St., Holmes Beach. Five home beachfront compound: two 3BR/2BA duplexes; two 2BR/1BA cottages plus 3BR/2BA ground level beach house. Heated pool, 33,000 sq. ft. lot. List price: $4,600,000. (Barry Gould)

201 35th St., Anna Maria Beach Place, Holmes Beach. Beach view six-plex with total of 10 bedrooms and seven baths. Heated pool. List price: $2,200,000. (Barry Gould)

1000 Gulf Drive, Unit 4, Beach House Resort Condominiums, Bradenton Beach. 1BR/1BA 500 sq. ft. unit, direct beachfront with unobstructed views of the gulf, $425,000. (Barry Gould/Ted Schlegel)

1000 Gulf Drive, Unit 5, Beach House Resort Condominiums, Bradenton Beach. Direct beachfront, 500 sq. ft., 1BR/1BA. Complete renovation will be finished by end of 2004. $425,000. (Barry Gould/Ted Schlegel)

1000 Gulf Drive, Unit 6, Beach House Resort Condominiums, Bradenton Beach. Direct beachfront, 500 sq. ft. 1BR/1BA. Complete renovation will be finished by end of 2004. $445,000. (Barry Gould/Ted Schlegel)

1000 Gulf Drive, Unit 7, Beach House Resort Condominiums, Bradenton Beach. Direct beachfront, 500 sq. ft. 1BR./1BA. Complete renovation will be finished by end of 2004. $435,000. (Barry Gould/Ted Schlegel)

1000 Gulf Drive, Unit 8, Beach House Resort Condominiums, Bradenton Beach. Direct beachfront, 500 sq. ft., 1BR/1BA. Complete renovation will be finished by end of 2004. $425,000. (Barry Gould/Ted Schlegel)

1000 Gulf Drive, Unit 9, Beach House Resort Condominiums, Bradenton Beach. Direct beachfront, 500 sq. ft., 1BR/1BA. Complete renovation will be finished by end of 2004. $445,000. (Barry Gould/Ted Schlegel)

Note: Units #1, #2 and #3 at the Beach House Resort are reserved pending building permit approvals.