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Miami Herald October 10th Rob Rose Interviewed for Miami Herald Article on Luxury Market
Miami Herald – Sunday October 10
By Lois Perdue, Special to the Herald
Slow Sales For High Priced Homes
In May 2001, Diane and Larry Brandt put their 1926 Spanish-style home in Coral Gables on the market for $1.1 million. It took more than a year to sell the property they had renovated over 12 years. After several price reductions, they finally sold their home for $900,000.''A lot of people came to see the house during that period,'' Diane Brandt said. ``But the market tightened up, especially after 9/11.''While home values continue to rise in both Miami-Dade and Broward counties, and moderate-priced homes are selling briskly, sales of luxury homes are lagging in some areas of Miami-Dade and Broward counties, especially if the property is not on the water.The supply of homes for sale at more than $750,000 is high in comparison to the number that are actually selling, compared with supply and demand in other price ranges. In an average month this summer, for example, there were 809 single-family homes for sale in Miami-Dade priced at $750,000 and above; 66 were sold, according to figures compiled by Esslinger-Wooten-Maxwell (EWM) Realtors from the multiple listing service. That means it would take 12.3 months to sell all the homes available. Miami-Dade had a 25.1-month supply of luxury condos.In contrast, in the less than $200,000 category, there was only a 2.8-month supply of single-family homes and a 3-month supply of condominiums. Supply is even higher than demand in Broward, with a 15.5 month supply of luxury single-family homes and a 47.8-month supply of $750,000-plus condos. A six- to nine-month supply of inventory reflects a balanced market, according to Ron Shuffield, president of EWM.RESALES SLOW In Coral Gables, resales of luxury single-family homes have slowed, though the inventory is not quite as high as it was a year ago -- 8.5 months in summer 2002 compared to 12 months in summer 2001. ''Sometimes sellers get greedy and overprice their homes,'' said Laura Mullaney, an agent with Coldwell Banker in Coral Gables. ``They may get lucky and sell, but they have to be realisticwhen they price their homes.''Most realty agents encourage their clients to stay within 5 percent of the price of other similar homes that have sold recently. Sellers in high-demand areas of Coral Gables have increased the price of their homes 25 percent or more above the price of similar homes that sold last year, according to Ashley Brinson Cusak, who is a broker/associate with EWM and specializes in Coral Gables property. ''Houses that sold for $750,000 last year are selling for $950,000,'' she said. ``That's a house in good condition, in a good location, and charming.''PRICING IS KEY If houses aren't priced realistically, they take longer to sell. ''The typical time frame has been about 30 days,'' said Mullaney. ``If there's no offer during that time, it will sit and sit. Then there will have to be two or three price reductions.'' In eastern Hollywood, the number of resales in this price range for the 12-month period ending in August has remained about the same, according to EWM'S Facts & Trends report. Prices have increased by about 15 percent for waterfront properties as well as for homes from U.S. 1 east to the ocean and from Johnson Street north to Washington Street, according to Barbara Marks, broker and owner of Monarch Properties in Hollywood. ''Usually the reason a house stays on the market is price-related,'' said Marks. ``There's not a lot of looking going on in this range in Hollywood now if it's not on the water.''In the past few years, hundreds of new condominiums in the $750,000 and higher range have been built, and more are under construction. Between the Fort Lauderdale beach and New River areas, for instance, there are more than 20 new luxury condo projects completed or under way. From downtown Miami to Sunny Isles, there are also about 20 new projects completed or underway. Developers say sales are brisk, though the supply of available condos still far exceeds the demand.At BellaMare at Williams Island in Aventura, preconstruction sales began in January. To date, 87 of the 210 units have been sold, according to Steven Wolfson, vice president of sales. Prices range from $800,000 to more than $3 million in the 30-story building being developed by WCI Communities. Anticipated completion is early 2005.The Related Group's AquAzul, to be built in Lauderdale-by-the-Sea, has sold 54 of its 80 residences since February. Prices range from the high $800,000s to more than $2 million. Groundbreaking is expected in November, with an anticipated opening in spring 2004.Coral Gables residents and baby boomers Joe and Alana Perez made one of those luxury purchases last year. The couple bought a 3,000-square-foot condominium at Siena, a 42-unit building at WCI Communities' Deering Bay Yacht & Country Club in Coral Gables.''We wanted to stay near our families in Coral Gables,'' said Alana Perez, co-owner with her husband of an advertising agency in Romania. ''And we wanted to live by the water. We have a boat and can dock it at the nearby marina.'' The couple purchased their new condominium for ``more than a $1 million.''Some real estate experts believe there may be too many high-priced projects, which will eventually outpace the demand. In a survey conducted by The Myers Group, a national building industry consultant, the inventory in buildings with units that cost $1 million or more has more than doubled in the past year in Miami-Dade and Broward counties, said Jack McCabe, regional director for the company's Boca Raton office. McCabe offered several reasons for the higher inventory. ''People who lost money in the stock market are not investing it in this kind of property,'' he said. ``Also, we aren't getting international buyers like we used to. And local residents, who were trading up to this price range, are now hesitating to take on more debt.''As prices continue to increase, some buyers are losing patience.LOOKING FOR VALUE ''We looked in Coral Gables and South Miami area for two years,'' said Dr. Richard Phillips, a gastroenterologist with a practice at Mt. Sinai Medical Center in Miami Beach. ``The prices are so inflated, it's ridiculous. It bothered us that there was very little value for our money.''Phillips began looking in Broward County and found a new, 5,000-square-foot home in Davie at StoneBrook Estates, a gated community of 129 homes ranging in price from about $700,000 to more than $2 million. Phillips and his wife, Carol, bought the home at preconstruction prices at just less than $1 million, according to StoneBrook's sales and marketing director Gregg Glasser.''We got a more rural environment with less congestion and more land,'' Phillips said.With both counties heading toward build-out, buyers are particularly interested in new luxury homes, where they can buy at lower preconstruction prices and can choose floor plans and finishes.At StoneBrook Estates, half of the 129 homes to be built have been sold. Prices have increased since the community opened for sales two years ago, and Glasser said there will be a significant hike in mid-November, of $30,000 to $50,000 per home. At Heron Bay in Coral Springs, a 2,800 single- and multi-family community being developed by WCI Communities, average pricing increased by more than 25 percent during the past year, according to spokesman Kyle Reinson. Homes sell from $300,000 to more than $1 million.YOUNGER BUYERS Seller Diane Brandt, who lived in Coral Gables for 30 years and owns a business on Miracle Mile, found the prospective buyers for her home different than she expected. ''They were younger -- with or without children,'' she said. ``They wanted more bedrooms in a home, such as five or six. While a lot of people liked an older home, some wanted to gut it and build what they needed.''THE LUXURY PROPERIES IN THE MOST DEMAND ARE THOSE ON THE WATERAbout 75 percent of Rob Rose's real estate clients come from out of state, primarily the Northeast; the rest are locals. ''Many are baby boomers and retirees who want to live in the eastern part of Fort Lauderdale on the water,'' he said. Two years ago Rose took Troy Bivings to look for a waterfront home in Fort Lauderdale. The retiree bought the first home he visited and signed the contract that day. It was just under $1 million. But Bivings believes he can more than double his money if he sells now. ''I'm going to ask $2.3 million,'' said Bivings, who moved to Fort Lauderdale from Key West. ``I've seen values increase here tremendously.'' The upgraded 4,400-square-foot home has indoor and outdoor pools, a four-car garage and an 800-square-foot guest cottage -- all on an acre along the New River. ''In today's market, if a house is under $1 million and on the water, it's considered a bargain,'' Rose said. ``Properties priced at more than $1.5 million seem to have slowed down, particularly in eastern neighborhoods -- waterfront or dry. But, I believe Bivings will get his price.''
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