Selling Luxury Condos in a Down Market

In part one, I discussed that certain media are helping perpetuate the notion that South Florida’s luxury condominium market is on the verge of a crash.

I disagree with that perception. In fact, many major players in the South Florida market would agree that what we’re seeing now is actually a normal – and healthy – correction following one of the biggest building booms in South Florida history. We’re transitioning out of a market that’s been running in overdrive the past few years into one that’s more sustainable, with a better balance of supply and demand, and more interest from the domestic luxury consumer.

But don’t get me wrong: Healthy doesn’t equal easy. Selling luxury real estate in a downturn presents distinct challenges, and these are what we are now facing in the South Florida marketplace.

Some developers are playing their hand; confident they will find buyers for their product. After all, even in a downward shift a luxury market will still exist. Others are holding their cards, waiting to see how things shake out here in the United States and abroad over the next few years.

Still others are folding, saddled with projects and funding issues that mean their projects won’t be moving forward at all.

When the market favors the buyer such as it does now, developers will have to be diligent and creative in their efforts to make their projects stand apart from all the others.

For those who stay in the game, a sound marketing strategy will be a critical factor that takes them all the way through sell-out. When the market favors the buyer such as it does now, developers will have to be diligent and creative in their efforts to make their projects stand apart from all the others. This is especially true for developers who haven’t been battle-tested and lack experience or expertise selling in a normalized market. Competition is healthy, but if they don’t have the tools to compete, said developers can quickly find themselves in trouble.

A Surgical Approach

Over the past 25-plus years, I can honestly say we at LGD Communications have seen it all. From a hot market to a cooled one, we’ve effectively sold more than $30 billion worth of luxury real estate in that time. We’ve seen numerous ups and downs in the market, and we’ve gained valuable insight and experience on what it takes to brand, market and sell out a luxury condominium development.

So what’s the takeaway? The buyers are there; you just have to know where to find them and how to market to them.

Simply throwing a bunch of building rendering ads out to the masses without any clear strategy (or a means to track your efforts) is costly and just plain ineffective. In today’s environment, what’s needed is a highly surgical, data-driven approach to marketing that identifies best prospects – high-net-worth individuals, wherever they may be – and speaks to them with messaging and imagery that resonate.

Predicting the Future

Part of our strategy is based on Predictive Analytics – looking at recent buyer behavior in multiple foreign markets and creating a reliable forecast for the next three to six months. Armed with this information, we can plan our media buys accordingly and focus our efforts on best prospects.

In today’s environment, what’s needed is a highly surgical, data-driven approach to marketing that identifies best prospects – high-net-worth individuals, wherever they may be.

While traditional brand ads continue to play their role in the marketing mix, digital is far and away the most cost-effective way to go and often makes up the majority of the marketing budget. Digital is especially effective because of the valuable data it yields.

At LGD, data drives strategy and tactics. We analyze data every which way to get a crystal-clear picture of who our clients’ best prospects are. Then we make it our business to know where they live, what they do, what they like and how they spend.

Listen to What The Market’s Telling You

Wouldn’t it be helpful to know what buyers and brokers are talking about? LGD TAG (Tracking, Analysis & Guidance) is a proprietary tracking tool that gives us an ear to the luxury market. As part of the program, our digital marketing team listens to each and every phone call that comes in to our real estate clients’ sales centers – hundreds of calls a month – to identify callers by brokers and buyers, qualify consumer response and identify emerging trends. This not only provides insight into buyer interest and language choice, but acts as a fantastic training tool, allowing us to hear firsthand how staff and sales agents handle prospect calls.

With TAG, we can see where traffic and conversions are coming from – both online and off – and which marketing tactics are outperforming others. More importantly, TAG provides developers and their sales teams with valuable information from the front lines and gives LGD the intel we need to continually calibrate the brand message for maximum efficacy.

Case Study: Privé at Island Estates

As Agency of Record for Privé at Island Estates, an ultra-exclusive, eight-acre enclave now under construction in Aventura on South Florida’s last private island, LGD has created comprehensive, multi-year branding and marketing campaigns for this luxury residential development.

With our help – particularly in the digital marketing arena – Privé recorded an astounding $70 million in sales from December 2015 through May 2016. (It should be noted that none of these residences sold for less than $2 million.) No other luxury residential project in South Florida is doing these kinds of numbers. What’s sparking so much interest?

Our digital campaign for Privé – encompassing Social Media, DSP (Demand-Side Platform, a highly targeted form of banner advertising) and PPC (pay-per-click advertising) – has played a big role in building awareness, generating leads and creating conversions.

Take a look at these numbers, just from the month of April:

Our campaign accounted for 55% of all traffic to Privé’s website and 22% of all website conversions, much of that from high-target areas such as New York, Mexico, South America and Spain.

By maximizing awareness of Privé in domestic and international target markets, we were able to boost the number of online impressions delivered 127%, to a record 2,067,574.

Our advertising efforts on Google and Facebook resulted in 4,403,499 online impressions for Privé, an increase of 177%.

More than 40% of all of Privé’s April website traffic – and 12% of all conversions – came from our DSP and PPC campaigns.

DSP…PPC…TAG…Social Media…These are just some of the proven ways LGD is helping Privé and our other clients successfully sell through a slowdown. If you want to learn more, feel free to give me a call at 305-576-9400 or email me at len[at]lgdcom.com.

In my next post, I’ll look at some of the areas in Miami-Dade and Broward where building luxury condos still makes sense, and why the interest is still building.

Previously:
Part One: South Florida’s Luxury Condo Market: Should We Be Worried?