The Miami Herald
August 26, 2007
Despite Slump, Luxury Home Market Still Kicking
By Richard Westlund
Jean Kachik of Keyes Realty stands by the 140-foot pool for a $13.9 million house she's listing in Weston's Windmill Ranch Estates.
When a Venezuelan buyer purchased a $5.25 million estate in Sunshine Ranches in southwest Broward on July 24, real estate agent Jean Kachik celebrated the sale and moved on to market her next listing: a $13.9 million five-acre property in Weston's Windmill Ranch Estates.
''My experience with the luxury market this year has been magnificent,'' said Kachik, an associate with Keyes' Weston office, whose recent sales include $4.45 million and $3.7 million estate homes in Weston's Windmill Reserve neighborhood.
''The luxury market was dead from last summer until the end of 2006,'' said Kachik. "Sales started picking up after Jan. 1 and really came back after May. All these high-end sales have occurred since then.''
While most of South Florida's residential marketplace remains in the doldrums, there are clear signs of life in the luxury segment, according to associates who specialize in properties from $1 million on up.
''I'm finding the luxury market is still very hot,'' said JoAnn Roberts, sales associate of Coldwell Banker in Pinecrest. "My sales volume is up from last year and the activity during June was particularly strong.''
Multiple listing service (MLS) statistics for Miami-Dade and Broward indicate a consistent pattern: Sales of single-family homes and condominiums priced at $1 million or more are down from 2006 levels -- but far less than the overall marketplace.
For instance, there were 178 Miami-Dade condo sales over $1 million in the second quarter, just 3 percent less than the 183 posted in the same period in 2006. However, sales volume in the county's overall condo market was down 33 percent.
In Broward, the overall second quarter sales decline was 28 percent, with a 19 percent decrease in $1 million and up sales.
''Inventory has stabilized, and the affluent world market is still coming to South Florida,'' said Mike Pappas, president, The Keyes Co., Miami. "The luxury segment right now is enjoying moderately strong demand.''
Ron Shuffield, president of Esslinger Wooten Maxwell (EWM) in Coral Gables, notes that South Florida's appeal to affluent second-home buyers from around the world is helping to support the region's high-end condos and single-family homes.
''It's unusual to have more activity in the luxury market, because the overall pool of buyers is smaller,'' Shuffield said. "Today's tighter lending practices are having an impact on buyers in the lower price ranges, but are usually not a factor with luxury homes and condos.''
Shuffield also noted that well-established affluent communities such as Coral Gables, Pinecrest and Weston have a consistent appeal to corporate executives and professionals, regardless of overall market trends.
Audrey Ross, a leading EWM associate in Coral Gables, says her luxury sales in the first two quarters of 2007 were among the strongest in a two-decade career. ''Most of these sales have been in the $5 million-plus sector,'' she said. "That indicates the wealthy are still buying. And those buyers who have plenty of cash are taking advantage of situations where owners have to sell and picking up great deals.''
In Miami Beach, the strongest demand is for mid-level luxury condominium units priced from $1.5 to $3 million, according to Kevin Tomlinson, associate with EWM's Miami Beach office. "I've seen a definite uptick in demand in the past two months, as we've had buyers from the Northeast, the U.K. and other parts of Europe.''
On the other hand, sales are still slow for higher-priced ultra-luxury penthouses and condominiums, Tomlinson added. "The exception is the residences on Fisher Island, which have done extremely well.''
One of the keys to a quick sale in the luxury market is proper pricing, according to Piper Rothan, sales associate, Keyes' Coral Gables office. ''I had a very nice listing on Old Cutler Road,'' she said. "When the seller reduced the price from $1.9 to $1.7 million, we received an offer in two days. In today's market, homes need to be at the right price -- at all levels.''