Luxury real estate market takes off again
by Josh Salman
Southwest Florida’s luxury real estate market has awakened from its prolonged hibernation with a vengeance this summer — the season when activity for high-end home deals is usually at its slowest.
From locals seeking an upgrade to European investors and even athletes training at Bradenton’s IMG Academy, an influx of millionaires scouting homes in the region has helped the industry dodge its typical summer lull in a big way.
Some areas are leading the charge, but in all, brokers say luxury real estate is clearly mounting a comeback.
“There’s a slight frenzy going on right now,” said Michael Moulton, an agent with brokerage Michael Saunders & Co.’s Longboat Key office. “Things are selling good across the country right now, and with inventory dwindling, people are trying to take advantage of the market before prices rise like they did below the $1 million mark.”
Buyers in Sarasota, Manatee and Charlotte counties snapped up 56 homes priced above $1 million in July, a 51 percent increase from June and a 124 percent jump from the same time last year, property records show.
With another 45 luxury deals pending in Southwest Florida — and the average shelf-life for those listings shrinking — industry analysts believe the luxury home market is beginning to flirt with the same boom-like conditions that have amplified the more intermediate price ranges since late last year.
The ferocious activity also has helped chip away the once overabundance of listings priced above $1 million. There is a current supply of 13 months based on July’s sales pace.
While that inventory is down from the 28-months’ worth in July 2012, it is not nearly as tight as the 3-month supply that has created a shortage for the overall market and prompted an uptick in new home construction.
Still, the 711 luxury abodes presently listed in Southwest Florida represent just half of what was available during the low point of the economic slump.
The sales values generated by those luxury properties also has seen the rise that the general market has experienced.
The average price per square foot in a home sold for more than $1 million last month was $423, down more than 9 percent from a year ago, records show.
“The luxury properties are selling at a quicker clip than the last few years,” said Jack McCabe, a real estate consultant in Deerfield Beach. “There’s been pent-up demand in the $1 million plus range in higher-end markets like South Florida, Sarasota and Naples.”
$6.8 million Longboat Key sale
The busy summer was led by the sale of a $6.8 million, newly constructed home on Longboat Key.
Alan B. Graf Jr., executive vice president and chief financial officer of FedEx Corp., and his wife, Susan, bought the 6,959-square-foot mansion in late July, court records show.
The sale was the most lucrative deal on the island in two years and one of the most expensive homes built since the market’s collapse. It also was the Grafs’ fourth home on Longboat Key.
Another 4,100-square-foot house on Longboat’s Yardarm Lane changed hands last month for $2 million. The same house sold for $2.8 million at the peak of the bubble in 2005.
Waterfront areas like Longboat Key, Casey Key and Sarasota’s centrally located neighborhoods have emerged as favorites for luxury buyers.
Of the 58 luxury transactions last month, 38 were registered in Sarasota County. Charlotte County — hit hardest by the Great Recession — also has been the slowest to recover.
But even in coastal Charlotte and the Cape Haze Peninsula, the luxury market is selling more than in 2011. That year, the area went six months without a $1 million home deal despite a plethora of waterfront estates.
“It’s definitely picking up,” said Bob Firth, a broker with the Re/Max Alliance Group in Englewood. “Buyers are looking at it as a better investment than putting their money in some bank. People are just not afraid of prices going down anymore. They’re not getting a depreciating asset.”
Stock portfolios rebound
Brokers say the summer uptick in high-end properties has been fanned by empty nesters picking up a retirement home they had previously put on hold.
Foreigners looking for a seasonal vacation house and affluent buyers here for temporary business also have helped.
Even local families, who had long been unable to move because they owed more on a house than what it was worth, have regained the wherewithal to upgrade into larger dwellings.
The strengthening appetite for higher-end properties comes as wealthy buyers have seen their stock portfolios rebound. Sellers also are being more realistic about pricing, said Roger Pettingell, a luxury specialist with Coldwell Banker.
“The values are ahead of where they were the last few years, but they’re still way off our highs,” Pettingell said. “These buyers know what the market is like in New York, and high-end places like California or Miami Beach. They see our market as undervalued compared to those places they come from.”
Pettingell’s top years for sales volume came during the market historic run-up in 2005, when he represented buyers on $54 million worth of deals.
Pettingell also was Southwest Florida’s highest grossing real estate agent in 2012, steering 48 transactions to the closing table for a total volume of $50.7 million, according to Multiple Listing Service data.
This year, the veteran Realtor has logged $60 million in sales volume — and he still has almost five more months left to sell.
Pettingell said he thinks this summer has been especially hot for sales because more buyers realize they can find better bargains now than during the peak of the spring tourism season.
“We’re seeing things we’re not used to seeing,” Pettingell said. “It’s not crazy like it was in 2005, when you knew somebody who wanted a property before it even came on the market.
“Right now, it’s just consistent.”
Back to Blog