| Luxury Real Estate Snapshot: Florida |
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By Maya Roney - 01/12/2007
A strong stock market and weak dollar are keeping the high-end home market afloat in
one of the country's most overvalued states
Florida has been hit hard lately. Not by hurricanes-but by sliding home sales and prices in this former hot
marketfor speculators.Homes in the $10 million-plus category, however, seem to be weathering the storm.
Existing single-family home sales in Florida were down 30% in November, 2006, from the previous November,
according to the Florida Association of Realtors. The statewide existing-home median
price fell 3%, to $242,500 in November, 2006, from $250,400 a year earlier.
These statistics place Florida among the worst-affected by the national housing market correction,
which pushed existing home sales down to a rate of 6.28 million in November, 2006,
10.7% below the November, 2005 pace. The national median existing home price
fell 3.1%, to $218,000, from $225,000 in the same year-over-year period.
The year ahead is not looking much brighter for the Sunshine State . The statewide median sales price,
evidence of the frenzied runup in prices in the first half of the decade,
is still 88.3% higher than it was in November, 2001, when investors swarmed Florida 's plentiful shoreline.
By economic law, the areas that had the most rapid price runups will see the sharpest price declines in 2007.
According to financial data processor Fiserv Lending Solutions, the Miami area, with an estimated decline
of 9.16%, is expected to see the second-worst 2007 price drop out of all the country's metro areas.
Survival of the Richest
The Realtors at Premier Estate Properties, however, never worry about gloomy statistics or predictions.
Florida's highly desirable Gold Coast-the region running along the eastern shoreline from
Palm Beach to Miami-had six $10 million-plus home sales in 2006.
The Boca Raton brokerage, which exclusively markets and sells estate properties in South Florida priced
in excess of $1 million, was involved in five of the six. "It was a really big year, higher than normal
in our market," says Premier Estates Realtor-owner Joseph Liguori.
"The $13 million-and-above category began heating up in the last quarter."
With the stock market picking up, the wealthy and well-invested are reaping sizable profits
and putting that into real estate, Liguori says. His buyers in the superluxury home class
last year included Europeans (Russian and English) motivated by the weak dollar and
Americans looking to "trade up" to a fancier house, like Liguori's $22.5 million, 23,800 square-foot
Italian-style villa in Boca Raton .
Over on Florida 's west coast, which is traditionally less popular with Northeasterners,
luxury buyers are also younger people using fresh earnings from financial service jobs,
according to Michael Moulton, a Realtor with Michael Saunders & Co. in Sarasota.
"There's a lot of Wall Street money coming down," he says. Although the first six months of the year were
"a little slow," Moulton notes that Michael Saunders was involved in two of the biggest transactions
in Sarasota County last year, including the sale of a home for $5.5 million.
The Realtors at Premier Estate Properties, however, never worry about gloomy statistics or predictions.
Florida's highly desirable Gold Coast-the region running along the eastern shoreline from
Palm Beach to Miami-had six $10 million-plus home sales in 2006.
The Boca Raton brokerage, which exclusively markets and sells estate properties in South Florida priced
in excess of $1 million, was involved in five of the six. "It was a really big year, higher than normal
in our market," says Premier Estates Realtor-owner Joseph Liguori.
"The $13 million-and-above category began heating up in the last quarter."
With the stock market picking up, the wealthy and well-invested are reaping sizable profits
and putting that into real estate, Liguori says. His buyers in the superluxury home class
last year included Europeans (Russian and English) motivated by the weak dollar and
Americans looking to "trade up" to a fancier house, like Liguori's $22.5 million, 23,800 square-foot
Italian-style villa in Boca Raton .
Over on Florida 's west coast, which is traditionally less popular with Northeasterners,
luxury buyers are also younger people using fresh earnings from financial service jobs,
according to Michael Moulton, a Realtor with Michael Saunders & Co. in Sarasota.
"There's a lot of Wall Street money coming down," he says. Although the first six months of the year were
"a little slow," Moulton notes that Michael Saunders was involved in two of the biggest transactions
in Sarasota County last year, including the sale of a home for $5.5 million.
A Place to Live
One of Moulton's current high-end offerings, a gated property overlooking the Gulf of Mexico on Longboat Key,
is listed for $6.99 million, the lowest price on BusinessWeek.com's selection of Florida 's Hottest Homes.
Longboat Key, an island destination with beautiful sunset views and first-class golf courses,
is only minutes by bridge from the city of Sarasota , a bustling metropolis of 400,000 with restaurants,
shopping, and even an opera house.
So while it may not be in your best interest to sell your home in Sarasota right now-the median sales
price in the area dropped 18% in November, 2006, from the previous November,
the sharpest decline in the state-it still seems like a pleasant place to live, if you can afford it.
"These are people that are going to be users, not investors" Moulton says of his prospective buyers.
"They aren't going to flip the property."
In other words, with the bottom of the housing downturn still far off in Florida , the trick to homeownership
in the state may be simple: Buy a fabulous home that you will actually use (at least for part of the year).
Between the beaches and the abundance of cultural activities, you won't have time to worry about
negative returns on your investment. As for the weather, well, that's another story.
"Just like traffic in New York and L.A. , you put up with hurricanes here," Liguori jokes.
"Even with all the hurricanes and these are all oceanfront properties we're selling
people are putting things into perspective."/span>
One of Moulton's current high-end offerings, a gated property overlooking the Gulf of Mexico on Longboat Key,
is listed for $6.99 million, the lowest price on BusinessWeek.com's selection of Florida 's Hottest Homes.
Longboat Key, an island destination with beautiful sunset views and first-class golf courses,
is only minutes by bridge from the city of Sarasota , a bustling metropolis of 400,000 with restaurants,
shopping, and even an opera house.
So while it may not be in your best interest to sell your home in Sarasota right now-the median sales
price in the area dropped 18% in November, 2006, from the previous November,
the sharpest decline in the state-it still seems like a pleasant place to live, if you can afford it.
"These are people that are going to be users, not investors" Moulton says of his prospective buyers.
"They aren't going to flip the property."
In other words, with the bottom of the housing downturn still far off in Florida , the trick to homeownership
in the state may be simple: Buy a fabulous home that you will actually use (at least for part of the year).
Between the beaches and the abundance of cultural activities, you won't have time to worry about
negative returns on your investment. As for the weather, well, that's another story.
"Just like traffic in New York and L.A. , you put up with hurricanes here," Liguori jokes.
"Even with all the hurricanes and these are all oceanfront properties we're selling
people are putting things into perspective."/span>
