Mike Pappas has been steeped in South Florida real estate his entire life.
The Miami native, joined by his brother, Tim Pappas, took over Keyes Co. from their father, Ted Pappas, in 1992.
Mike’s daughter and Tim’s son both work at the family-owned business, which has some 2,200 associates in 35 offices across South Florida and handles more than $3billion in annual sales.
Amid a wave of consolidation, Keyes is one of the few big real estate brokerages in South Florida that continues operating independently.
Pappas, who went to Wake Forest University on a track scholarship, views his profession with the perspective of a long-distance runner: He keeps an eye on the long haul and works to keep pace with the ever-changing landscape.
In addition to its brokerage, the company offers title, mortgage, insurance, property management and relocation services.
Besides running Keyes, Pappas stays active in professional groups, such as the Big Broker Advisory Board of the National Association of Realtors and the Broker Advisory Board of Realtor.com and Trulia.
All of which gives credence to his views on South Florida and its dynamic real estate market. Pappas recently sat down for an interview with the Miami Herald and then responded to emailed questions.
Q: Miami-Dade and Broward counties are seeing a slowdown in home and condo sales. What’s going on? What is your outlook over the next year?
A: We are moving from a distressed market to a real market. The investors and opportunistic buyers are waning and being replaced by buyers and sellers who take action for life and family reasons. Since the bottom pricing of 2011, the average price for Dade and Broward went from $220,000 to now over $330,000. The closed units for Dade and Broward year to date are off 5.5 percent, but the average price is up 11 percent, which gives us an overall 5 percent volume increase this year, which is outperforming the national numbers.
I am bullish on our expanding economy and the strong world desirability of South Florida, which bodes well for an increasing real estate market in South Florida in 2015.
Q: Keyes Co. is one of the last big independently owned real estate brokerages in South Florida. Can you still be independent and compete?
A: We are proud of our 89-year South Florida history and have a focused future. Real estate is still local, and neighborhood expertise is demanded. However, with the richness and reach of the internet — along with the international allure of Miami — a firm also needs global exposure.
As a shareholder of the Leading Real Estate Companies of the World — a network of 500 plus premier, national and international firms with $300 billion in annual sales — we have the best of both worlds: we are local and global.
Like all businesses, vision, leadership, strategy and execution are the differentiators that can give a company an edge in a dynamic and changing market.
Q: What do you see as the biggest challenges for an independent firm such as Keyes?
A: Adjusting and changing with the times. We see this as an advantage for us. The members of our leadership team are leaders in the industry. We are able to be responsive and agile to the changes. We have a bottoms-up approach, with associate advisory boards in each office, management task forces paired with our department heads who all are striving for improvement and providing a “wow” customer real estate experience.
Q: How is the proliferation of online real estate data changing your business?
A: We are in a revolution. Previously, the industry controlled the data and information, and now it is ubiquitous. Therefore, the interpretation, understanding and ability to communicate the trends and their significance are critical. Immediate response, superior service and local expertise are the ingredients for success today.
We are in the embryonic stage of “big data” beginning to see predictability of consumer behavior prior to their taking action through multiple data-collection sources.
Q: You mention the current debate in the real estate brokerage community over who controls the listings. Can you explain? What does it mean for buyers and sellers?
A: The broker controls the listing and agrees to share the listing with other firms for cooperation on the Multiple Listing Service.
They also decide on the best Internet distribution channels to display the properties to the public, on like Realtor.com, Zillow and Trulia. There are hundreds of these sites.
However, if a brokerage firm or associate does not protect his listing on these sites — paying for position and enhancements — those leads or inquiries are being sold to other firms or associates.
Also, in the quest for eyeballs, accuracy and timeliness of inventory have been distorted, and this has caused confusion for customers. The brokerage community is debating the current system. And the proposed mergers between Zillow and Trulia, and Realtor.com and News Corp., are accelerating the discussion. The new world order is clashing with the status quo.
Q: Miami often is cited as one of the metropolitan areas with the highest cost burden for housing. How do you see that issue playing out here in the next few years?
A: South Florida is still a good value with a high affordability index due to extremely low historic interest rates and many properties still below their boom prices.
South Florida has the land mass equivalent to Long Island, New York. There are 125 miles between Homestead and Jupiter and only 20 miles between the Atlantic and the Everglades, with almost six million inhabitants. With a growing population and limited land in South Florida, prices will rise greater than the U.S. average in the future, which will hurt affordability.
Education: Westminster Christian High School; B.S. double major in business and Spanish from Wake Forest University
Family: Married 34 years to Kathy, his high school sweetheart. They have five adult children: Nicole, Christina, Rachel, Ryan and Katie. Brother Tim Pappas is a partner and vice president of finance at Keyes.
Professional activities: Serves on the Broker Advisory Board of Realtor.com and Trulia and the Big Broker Advisory Board of the National Association of Realtors. Director of Realtybid.com, a real estate online auction company.
Outside interests: Running. Completed four marathons. Preparing again for the 70-mile Dolphin Cycle Challenge in February 2015 with 150 Keyes associates to raise funds for the UM Sylvester Cancer Center.
Number of associates at Keyes: 2,200
Offices: 35 throughout South Florida
Sales: in excess of $3 billion.