Sarasota Condo Market in 2026: Is Your Building Financeable?

"Associations who have reserved funds all along are prepared; those who failed to adequately reserve are playing catchup...and the cost to catchup can be substantial to the point to where owners sell." David Novak of Longboat Private Services, whose company manages more than 900 residential units, said this to Your Observer this spring.

That sentence explains Sarasota's condo market better than any median price. Sales are recovering. But two units with the same view, square footage and asking price can now be very different purchases. One may qualify for a conventional mortgage while the other may not, and the difference sits in the association's budget, reserve study and repair records. The lending rules behind that difference changed on August 3, 2026, and they change again on January 4, 2027.

The Recovery Is Real, and It Is Uneven

In August 2026, the latest month available as of early October, Sarasota County's townhouse and condo market showed real improvement over a year earlier. Here are the figures from the Realtor Association of Sarasota and Manatee's August 2026 summary, produced by Florida Realtors:

These figures came out September 16, and the September data is scheduled for October 16, 2026. David Crawford, president of the Realtor Association of Sarasota and Manatee, told the Sarasota Herald-Tribune that buyers are "getting off the fence" while sellers are "being more realistic about the value of their properties."

Look closer at the cash line. In August 2026, 168 of 281 closings were paid in cash, close to 60%. A month earlier, the July 2026 average condo and townhome sale price in Sarasota County jumped 62.7% year over year to $610,513, according to the Herald-Tribune. The July median rose 13.3% to $340,000. When the average climbs that much faster than the median, a smaller number of high-priced sales is pulling it up. Brad O'Connor, chief economist of Florida Realtors, told the paper that luxury buyers are more likely to pay cash, put more money down or use equity from other property.

The data does not show how much of the cash share comes from wealthy buyers and how much from buildings where a loan is hard to get. Both explanations can be true at the same time. If you plan to finance, though, the second one is the one that changes what you can buy.

Lenders Approve the Building Before They Approve You

Most conventional condo loans are sold to Fannie Mae or Freddie Mac, so their project standards decide which loans are available. Fannie Mae will not buy a loan on a unit in a project marked "Unavailable" in its Condo Project Manager system. Freddie Mac has a similar bar for projects it has found ineligible. Lenders often call these buildings "non-warrantable."

Fannie Mae's Selling Guide lists what makes a project ineligible. The list includes significant problems with safety, structural integrity, habitability or financial viability. Examples include water intrusion or mold, advanced deterioration, failed mandatory safety inspections, and more than $10,000 per unit in unfunded repairs due soon.

Special assessments are where buyers most often get surprised. An assessment alone does not automatically disqualify a building. Lenders look at its purpose, whether it was approved, how much has been collected, how much is left and when it will be paid off. If it pays for a critical repair that has not been finished, the project stays ineligible until the repair is done. A building that is in the middle of the work Florida now requires can be harder to finance during the work than it was before or will be after.

You also can't look this up yourself. Fannie Mae's Condo Status Finder is designed for associations, management companies and their advisors. Fannie says it does not share eligibility decisions with the public, and "No findings" does not mean a project has been reviewed or approved.

What Changed This Year, and What Changes Next

Florida condo buyers saw several rule changes in 2026. Here they are in order:

The August change matters for Florida in particular. Fannie Mae's lender letter says retiring Limited Review "effectively retires the remaining geographic restrictions that apply to the state of Florida." The special treatment for Florida is gone, but established projects that used the lighter review now go through a Full Review or, where it applies, a waiver of project review. Every building is judged on its own records.

The January change hits the budget directly. Freddie Mac's current rule for established projects requires at least 10% of budgeted assessment income to go to replacement reserves, and special-assessment income doesn't count toward it. For loan applications dated January 4, 2027 or later, the minimum becomes 15% under Full Review. If an association sets its 2027 budget this fall, the reserve line in that budget may decide whether a unit can be financed next year.

Florida's Reserve Rules Push the Same Way

State law is pushing associations toward the same result. HB 913, signed June 23, 2025, set December 31, 2025 as the structural integrity reserve study deadline for qualifying owner-controlled associations. Associations with a milestone inspection due by December 31, 2026 can complete the study along with that inspection, but no later than December 31, 2026. The Florida Department of Business and Professional Regulation explains that if a study finds reserves are too low, an association may need to levy assessments or borrow to meet its funding schedule.

Longboat Key shows what this looks like in a real place. Planning, Zoning and Building Director Allen Parsons told Your Observer that 198 buildings there needed milestone inspections and all passed. Only two needed a Phase 2 inspection, and neither needed follow-up permits for structural repairs. Owners still felt the cost. Mayor Debra Williams said quarterly payments "have gone up quite a bit because there are a lot more of these reserve items that they have to fund."

A building can be structurally sound and still face a big funding gap. For a buyer, the inspection report and the reserve study are separate questions.

HB 913 also gave buyers more time to review association records. According to the Governor's summary of the law, associations must disclose how they fund their reserve study to owners and prospective buyers, and buyers now get seven days to review the association's financial information instead of three. The law also raised the threshold for other deferred-maintenance items included in the study from $10,000 to $25,000 and gave associations more funding options.

Putting the Seven Days to Work

With two Sarasota condos at similar prices, the association documents usually tell them apart more clearly than the listing photos do. Buyers comparing buildings this fall commonly ask for these records:

1. The structural integrity reserve study and its funding plan. Has it been done? Is the association on the Dec. 31, 2026 combined-inspection track? How is it funding the study's recommendations?
2. The milestone inspection report, if the building needed one. Did it need a Phase 2 inspection? Are any repairs still open?
3. The current budget and the proposed 2027 budget. Look at what share of assessment income goes to replacement reserves, compared with the current 10% minimum and the 15% minimum starting January 4, 2027.
4. Any special assessments. What is each one for? Was it approved? How much has been collected and how much is left? When will it be paid off?
5. The master insurance policy. Check the per-unit deductible against Fannie Mae's $50,000 cap.
6. A lender's early review of the project. Since buyers can't see Fannie Mae's eligibility decisions, the lender's review is usually how a financed buyer finds out where a building stands.

Each item is tied to a rule above. None of them is something you can read from a listing description.

Questions Buyers Ask

Is a cash-only condo a bad building?

Not necessarily. O'Connor's comments point to luxury buyers who pay cash by choice. A building may also be in the middle of repairs that make it temporarily ineligible and then become financeable once the work is done. The association's records explain why a building is selling mostly to cash buyers.

Will the 15% reserve rule apply to a contract signed in December 2026?

The lenders tie the new minimum to the loan application date. It applies to applications dated January 4, 2027 or later under Full Review. A lender can confirm how a specific loan's timing works.

Does a passed milestone inspection mean no assessments are coming?

No. Longboat Key's buildings all passed, and owners there still saw higher quarterly payments because of reserve funding. Future costs are covered in the reserve study, not the inspection.

Is there newer market data than August?

The September 2026 Sarasota County report is scheduled for October 16, 2026. Until then, August is the latest month available.

If you're comparing Sarasota condos from out of state, I can request and go through association budgets, reserve studies and assessment histories for you, and get a lender's read on the building before the seven-day window starts. Celine Charleson helps buyers sort out which buildings are ready for January 2027 and which are still catching up. Let's Connect.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.