It is no secret that South Florida’s real estate market has experienced a slowdown in condo sales. The signs of a downturn have dominated headlines with many citing a strong dollar as one of the reasons keeping foreign buyers at a distance. The current market has its fair share of challenges, but it also presents an opportunity for developers and brokerages to be creative and think outside the box in order to boost momentum and stay on track in selling out existing projects.
While the market is poised to pick back up sooner rather than later, developers are looking to their sales teams to switch up their approach and sales models to generate results. Looking at untapped markets, repositioning existing properties and remaining bullish on past leads are just a couple of proven strategies from experienced work-out firms.
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Historically Latin American buyers have been key to South Florida’s growth, but with Latin American buyers slowing down, it is crucial for real estate brokerages to have established national and global networks to reach new buyer markets.
At Pordes Residential, we have found great success, especially in the final stretch of sales, in finding new buyers within the United States, particularly in the Northeast and West Coast as well as Canada. In fact, according to a report by the National Association of Realtors, Canadians represented 18.9 percent of Florida’s international buyers in 2016, up from 11.1 percent.
In 2009, Lehman Brothers took back the Canyon Ranch project in Miami Beach, which included 430 luxury residential condos and 150 condo hotel units. We were able to completely sell out the remaining 350 units owned by Lehman Brothers within only two years by going outside the typical Latin American buyer market. Ultimately, only 7 percent of buyers came from Latin America with the overwhelming majority of 70 percent coming from various regions within the United States, proving South Florida’s wide-reaching appeal is still there.
When a project has been on the market for an extended period of time with little success or has hit a sales roadblock, engaging in a thorough analysis of the sales program is the most efficient approach. Determining previous strategies and methods to grasp what has or has not worked is key to avoiding the same pitfalls. Honing in on what makes your property stand out from the rest is imperative to finding success in oversaturated markets. More important, counting with a team that practices a hands-on approach by senior management and true A-list sales teams can ensure your project does not get lost when the market faces an oversupply of inventory.
At the landmark condo-hotel ONE Bal Harbour, our company sold residences at near record-breaking, per-square-foot prices in 2011 after a new strategy was implemented following a thorough market and project analysis. The distressed project was repositioned and re-merchandised and a target market was redefined, which resulted in sales over $25 million for 49 sold condo-hotel units within only 15 months.
Creating broker focus groups featuring an area’s top sellers to gather data and insight into a neighborhood is beneficial when determining how to present a project in a fresh new light. Diligently following up with past leads and with an area’s top brokers can trigger sales and lure buyers if approached at the right time or with new offerings for future residents.
Additionally, don’t underestimate the power of current residents. Existing property owners are a development’s greatest ally, and creating goodwill with residents can go a long way for reaching into their network of potential fellow buyers. Reengaging with owners with an open-arms approach can go a long way in receiving new referrals.
Slowing markets present challenges but also new opportunities if faced with the right approach. The prospect of the South Florida real estate market is bright with exciting new developments on the horizon, making it the perfect time to implement new innovative strategies to reach new buyers.
Mark Pordes is the CEO of Pordes Residential Sales & Marketing. www.pordesresidential.com.
▪ This was written for Business Monday in the Miami Herald and reflects the view of the writer, not necessarily of the newspaper.
▪ Got a ‘Broker’s View’? Realtors may submit columns for Broker’s View of 700 words to to rclarke@MiamiHerald.com. This feature is intended primarily for residential brokers, who will be given preference, but pieces about commercial real estate will also be accepted as space allows.