South Florida home sales hit 6-year high in volume but not price
BY TOLUSE OLORUNNIPA (Miami herald)
Celebrity name-dropping, Twitter contests, skywriting planes and free grub are all strategies home sellers and real estate agents are using to entice buyers to the closing table in South Florida’s oversupplied and uncertain housing market.
The list of marketing gimmicks used to sell houses and condos has grown longer and more eccentric as the real estate market has struggled toward an awkward rebound, characterized by high sales volume and deeply discounted prices.
In terms of selling properties, the sellers’ strategies—which include catering to the ever-important international buyer—have helped push sales numbers to boom-time levels, although prices in parts of the market continue to sputter.
In Miami-Dade County, existing home sales reached 1,031 in the single-family market and 1,542 in the condo market in March, up 59 percent and 85 percent, respectively, over last year. According to a report released by the Miami Association of Realtors on Wednesday, those were the highest sales totals since the 2005 buying frenzy.
Broward also reached new six-year highs in March, with 1,169 home sales and 1,837 condo sales, increases of 8 percent and 25 percent, respectively.
“Miami and South Florida continue to outperform last year’s healthy real estate sales levels and the U.S. real estate market, reflecting the truly unique nature of our area and market,” said Jack H. Levine, Chairman of the Board of the Miami Association of Realtors.
But the housing bust and a lingering foreclosure crisis have forced a glut of sellers to look to new approaches to make their properties stand out in the crowd.
To kick off the spring selling season, the Florida Association of Realtors staged a statewide marketing event last month, hoping to sell homes the old-fashioned way—with 12,000 open house events to convince buyers that now is a good time to purchase Florida real estate.
Real estate agents pointed out bargain prices to house hunters, but many buyers still need to be convinced that the foreclosure-battered market will begin to see sustained price appreciation in the near future.
Signs are mixed. In March, prices of Miami-Dade homes continued their historic plunge, falling 19 percent in the single-family home market to $159,800, and dropping 30 percent in the condo market, to $97,400. Both are year-over-year comparisons.
Things looked better in Broward, where median prices for single-family homes rose 8 percent to $175,400 and condo prices rose 1 percent to $70,100. It was the second consecutive month of year-over-year price appreciation.
At One Sotheby’s International Realty, selling agents are trying to reinvigorate the house-hunting process by infusing social media and technology at open houses.
The company’s “Spring Fling” promotion uses the GPS-powered mobile app Foursquare to encourage other brokers to host showings at Sotheby’s properties, and “check-in” at the properties. The broker with the most check-ins will receive an iPad 2, said Beth Butler, president of the Miami Beach brokerage.
“When there is a large number of houses on the market, it’s kind of a way to keep [a property] on people’s top of mind,” she said.
Other real estate firms have shifted their marketing focus completely toward international buyers, as cash-wielding Latin Americans and Europeans have dominated the market. While locals struggle to obtain financing, real estate agents are traveling to countries like Venezuela, Brazil and Canada to snag cash-heavy buyers.
Agents Esther Percal and Pablo Alfaro used their international connections to sell an $11.5 million condo at Apogee in Miami Beach this month, after that property had been on the market for three years. The buyer came from Europe.
Edgardo DeFortuna, CEO of Fortune International Realty, said his company has benefitted from having offices in Buenos Aires and Sao Paolo, places he travels to frequently to recruit buyers.
“We host small dinners, asking our existing buyers to bring their friends, and then we present the project,” he said. “They know the values are significantly better today than they were two or three years ago.”
In South Florida, 60 percent of existing home buyers came from outside the U.S., according to Wednesday’s sales report. For new homes and condos, that number is 90 percent.
With condos selling at a pace that rivals 2005, building owners have even brought back the condo launch party as a promotional tool. Complete with free booze, high-end hors d’oeuvres and celebrities, the lavish events get people talking about a particular building.
At the launch of the 849-unit Vizcayne condo last week, hundreds streamed in to binge on free food and tour model units in the high-rise building. After acquiring the downtown Miami building in a foreclosure sale last year, the new owners began looking to generate the kind of buzz that could lead to a strong sales pace in this market.
In February, the owners scrapped the old moniker (Everglades on the Bay) and hired sky-writing planes to scrawl the building’s new name “Vizcayne” into the sky. Unfortunately, cloudy weather foiled the plan.
In Miami Beach, a property where iconic actress Elizabeth Taylor visited regularly as teenager is on the market. The selling agents are playing up the Taylor connection, hoping the celebrity’s memory will appeal to potential buyers.
For everyday homeowners who do not have the marketing budget to generate buzz for the home they want to sell, the most popular strategy has been to simply cut prices.
As homeowners compete with the region’s glut of foreclosures and distressed sales, more and more are cutting prices multiple times in order to attract buyers.
In Miami, 11 percent of home sellers slashed prices on their homes in March, the second highest rate in the country, according to real estate research firm Trulia. There is a 38 percent chance that a Miami home seller will need to slash prices more than once in order to achieve a sale, Trulia found.
Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach, said sellers will have to continue decreasing prices, as the foreclosure process continues to be slowed amid accusations of fraud and court irregularities, and financing hardships eliminate local buyers from the market.
“I see prices flat or declining over the next year or two, then staying flat for some time after that,” he said. “In a good market, sellers dictate prices, but in a bad or depressing market, buyers dictate prices.”