February 6, 2014 by: Nolan Peterson | News Editor, The Observer Group
In 2011, three years after the 2008 housing market crash, Sarasota Realtor Robert Milligan knew what he had to do. He needed to expand his business into a new market to offset revenue losses from the economic downturn, which had dried up Sarasota real estate sales and sent property values in a tailspin. The Sarasota native and his wife, Crystal, planned on raising their two children in Sarasota, but Milligan, who is Florida president of Allison James Estates and Homes, made what he called a “tough decision” to uproot his family and move to Orlando.
“I never quit on Sarasota,” said Milligan, who began working in Sarasota real estate at 16 and was licensed by the time he was 19. “We did still have some business here. But I was kind of looking for greener pastures in Orlando. We were looking to cast a wider net to offset a loss of revenue in our narrow area in Sarasota.” Milligan spent two years in Orlando, still running his Sarasota office remotely, while he courted new business in the Orlando market to survive the recession. But starting around January 2013, Milligan’s phone started ringing again with prospects in the Sarasota area.
“For a couple years there was almost nothing going on in this region,” Milligan said, “and suddenly all my phone calls were about properties in Sarasota.” And so last summer, lured by Sarasota County’s recovering economy and resurgent property values, as well as the area’s quality of life, Milligan returned with his family to Sarasota.
Milligan’s story parallels a larger trend in the Sarasota real estate industry. The Sarasota Association of Realtors reports that its membership jumped from 3,328 to 3,650 in 2013 — a 9% increase — compared with a 2.8% membership increase in 2012 and a 0.5% increase in 2011. “There is a distinct parallel between the rebound of the market and the influx of Realtors back to the area,” said Kathy Roberts, Sarasota Association of Realtors CEO. In the years leading up to 2008, droves of Realtors flocked to Sarasota County, enticed by booming home prices and an affluent economic base. But the 2008 economic colla and the ensuing recession pummeled the area real estate industry, instantly erasing years of rising property values. Sarasota County’s property tax base, for example, which i determined by home values, dropped by 40% during the recession. Many area Realtors were forced to leave the area for better opportunities in areas less affected by the cris — some left the profession altogether.
The ranks of the Sarasota Association of Realtors, in particular, were hit hard by the economic downturn; the group’s total membership dropped by about 19% from 2007 to 2010. “It was a mass exodus,” said Thomas Hedge Jr. of the Hedge Team at Premier Sotheby’s Realty. One advantage of the downturn, according to some, was that it purged many opportunists looking to make quick profits by turning over properties with artificially inflated values. “Just prior to the crash, everybody in the world was in real estate and there was a lot of unprofessional conduct and people who di belong in the business,” Milligan said. “And then people were leaving left and right. For the most part the people doing well now ar the survivors.”
“You just kind of knew those people weren’t made for the business in the long run,” Hedge added. “But you saw the professionals stick around.” Hedge, a licensed Realtor since 1996, and his team stuck with the Sarasota market during the recession, surviving “with a lot of be tightening.” “I don’t remember taking any vacation at all in 2008,” Hedge said. “But 2009 was the toughest time; we had to significantly cut dow spending on our business.” The composition of Sarasota County’s new Realtors indicates that the majority of new arrivals to the area’s real estate industry are returning professionals who moved to othe areas during the recession.
“About half or a little more of new members are actually returning SAR members,” Roberts said, adding: “We are seeing a lot of younger people coming into real estate for the first time.”
The rebounding real estate market, however, has inspired some worry among Realtors with long-term roots in the area. “We’re definitely seeing a lot of new faces,” Hedge said. “When the going was great, there was an influx of new Realtors. And now there is a real concern for a saturation.” The rapid rise in property values also has some Realtors on edge about investors continuing the same “house-flipping” practices that contributed to the 2008 crash. “Greed is back,” Milligan said. Roberts interpreted last year’s increase in membership as part of a long-term trend. “We’ve seen a big surge in new members so far in January,” Roberts said. “And I would see it trending upward going into this year.”
For Milligan, the decision to return to Sarasota is a permanent one — no matter how much the market gyrates in the future.
“In the course of going through periods of fat and thin, I did come to appreciate that a quality lifestyle for my family is more important than downturns in business,” Milligan said “Luckily the business prospects are good here now.”
Contact Nolan Peterson at firstname.lastname@example.org