– A Message From Len Dugow, President & Chief Creative Officer, LGD Communications, Inc.
Despite Miami’s residential real estate development frenzy – or perhaps because of it – luxury condo developers are seeing a few clouds on the horizon.
Since the current cycle began in 2011, 43 new condo towers with nearly 3,700 units have been completed in South Florida and another 116 buildings with more than 11,500 units are now under construction1. And even more are planned.
In Greater Downtown Miami, one of South Florida’s busiest condo markets, inventory is already high and will continue growing. Since 2011, developers have announced plans to build at least 71 new condo towers in the area with nearly 21,450 units. Nearly 1,900 new units have been delivered to date, and thousands more are under construction and will be delivered over the next two years2.
Yet in spite of these robust numbers, there are clear signs that the coming season could be a challenging one for developers of luxury condo projects. High inventory combined with rising costs for land, raw materials, labor and construction are squeezing profits. At the same time, rising prices and a strengthening American dollar are translating to fewer of the international buyers who have accounted for a huge percentage of sales in recent years.
Other signs also point to a coming slowdown for the luxury condo market:
The percentage of cash buyers in Miami has dropped about 10% over the past year, from 65% to 53% (nationwide, the number is about 34%)2, as international buyers more likely to pay cash face plummeting currencies at home, a stronger dollar and rising South Florida condo prices.
More than 15 condo towers with at least 2,700 units have been cancelled or significantly revised due to changing market conditions over the past year1.
Several major developers have reduced the required deposit structure on pre-construction units and are offering higher commissions to brokers.
Some developers, trying to anticipate the length of this market correction, have pulled the plug on planned projects that have yet to break ground.
Greater Downtown Miami now has a 19-month condo resale inventory3 (a balanced market usually has 6 to 12 months), indicating that we now are in a buyer’s market.
Your Digital Strategy For Success
LGD’s newest digital branding and web development release for BH-3 and Gary Cohen’s Privé at Island Estates.
None of this heralds a real estate crash like the one we experienced beginning in 2008. It’s simply a sign that South Florida’s overheated luxury condo market is now beginning to stabilize. As the market cools down to more normal levels, it’s now more important than ever for developers to invest in strategic marketing programs that produce real, quantifiable results.
For pre-construction projects that need to distinguish themselves from the scores of other already-announced developments – or for under-construction projects with languishing inventory – digital marketing is the surest way to generate qualified leads and conversions, not just here in South Florida but around the globe.
Always at the forefront of digital marketing’s best practices, LGD Communications has been marketing luxury real estate to high-net-worth consumers and high-performing brokers for more than 20 years. At LGD, digital marketing is a strategic, data-driven endeavor that connects your brand with the right buyers and brokers – across every medium – through a combination of:
Social Media Marketing
Search Engine Optimization (SEO)
Display Banner Ads
Tracking, Analysis & Guidance (TAG)
Modernized, User-Friendly Website Development
TAG is LGD’s proprietary tracking software that gives you an inside look at the immediate success of all marketing initiatives, online and off. With TAG, we’re able to:
Track and measure every aspect of your campaign – both traditional and digital – to ensure we’re moving traffic and leads efficiently
Record and monitor every phone call to determine caller interests, capture valuable caller data and qualify callers
Nimbly shift strategies and budgets – before your budget is depleted, NOT AFTER – to take advantage of the best opportunities to build your brand and drive sales
Provide a significant return on your marketing investment
LGD Is Here To Help
As experienced master strategists battle-tested in the arena of luxury real estate, we apply our expert perspective and boundless creativity to everything we do. More importantly, LGD’s in-house staff of 23 enables us to offer all of our services under one roof – saving you time and money, and ensuring consistent and effective branding across all channels.
Check out our digital marketing capabilities and a brief case study on how we helped one of our clients sell $20 million worth of real estate this past July – typically one of the slowest months of the year for luxury condo sales.
If you’d like to learn more about how LGD can help you, give us a call at 305 576 9400 or send us a message.
“Has Miami’s luxe market lost its vigor?” Sean Stewart-Muniz, The Real Deal South Florida Real Estate News, October 2015
“South Florida’s peak anxiety,” Peter Zalewski, The Real Deal South Florida Real Estate News, October 2015
“Downtown Miami condo market set for a fall,” Sep Niakan, Market Watch, October 12, 2015