Historically low inventory has divided island real estate agents into haves and have-nots. While many agents are struggling to secure listings and find houses for their clients, others are having their best years ever.
The first part of 2022 has been challenging for everyone, with the total number of island sales down drastically from last year at this time – and dollar volume of properties sold 17 percent lower in the first quarter than in the first quarter of 2021.
But many top island agents have figured out the algorithm, and are feeling good about the market and the future.
“It is all good to me,” said Scott Reynolds, who manages the Reynolds Team at Compass. “I tell my agents not to use the term low inventory. We call it an accelerated market. Lots of deals are being done. But houses don’t sit on the market long enough to be counted as inventory.”
“I have never made this much money in my entire life,” said Cathy Curley, a Dale Sorensen Real Estate agent whose business doubled in the first part of 2022 compared to 2021.
Multiple factors tend to distinguish the haves from the have-not agents in the current market – including how long they’ve worked in real estate in Vero Beach, the depth of their market knowledge, their adaptability and how hard they work.
But nothing has been more important than mastering the art of the private real estate deal – one done within a network, that doesn’t show up on the MLS until it closes.
Because listings are scarce and houses that go on the market are gobbled up quickly, it’s been increasingly hard to get people who might otherwise be sellers to put their homes on the market.
Even though prices are at record highs, people hesitate to sell because they’re afraid they won’t be able to find a replacement home they like.
“Where will I go?” is the common refrain.
To meet this objection, agents often have to engineer complex, multipart deals that weren’t a feature of island real estate a few years back.
For example, an agent hears from a client who wants a house of a certain style and size. There is no house like that on the market, but the agent knows of several suitable off-market homes, including one owned by clients or friends who have talked about moving but not acted.
“It’s like matchmaking,” said Sally Daley, who leads a team at the new Douglas Elliman office on the island.
“If I know of a house that would suit one of my buyers, I might call and ask the owner what number would make them a seller. If that number is in my buyer’s budget, I can go back to the owner and tell them I can bring them an off-market deal for the price they want from a buyer who will let them stay in the house for 90 days or six months, so they aren’t rushed.
“If they are still hesitant, we ask what they are looking for in a new place and tell them we will help them find it. The question then becomes, ‘If I find you a place to go, will you sell?’”
Often the answer is yes.
Daley said half of her deals so far this year have been off-market transactions worked out between individuals in her network without ever being exposed to the public.
Successful agents are always on the lookout for what Curley calls opportunistic buyers, people who will make a move if the price is compelling enough. With so many wealthy pandemic migrants wanting to move to Vero Beach, there is a good chance a well-connected agent can find a buyer once they have a price in hand.
“I have a neighbor who paid $1.7 million for his home,” said Curley, who noted she is doing an increasing number of private deals. “He could sell it all day long for $3 million. Is he a seller at $3 million? He isn’t sure yet – he is chewing on it. But he is definitely a seller at $4 million.”
Longevity is a great virtue in the sophisticated arbitrage process that now characterizes the island market.
“I have been doing this for more than 40 years,” said Charlotte Terry, a top agent at AMAC Alex MacWilliam Inc. “That helps because it is very important how well the agent knows the market and other agents.
“Those longstanding relationships are so important, whether it is someone calling me and telling me they are about to list something in Village Spires and asking if I have anyone for it – which I do – or me picking up the phone and calling people I have known forever to see if they have anything coming in Riomar or on the river that would be good for my buyer.
“Those kind of old connections help you get your client in there to make a deal before it becomes a feeding frenzy.”
Market knowledge, including detailed awareness of hundreds of individual island properties sold or shown throughout the years, and a wide network of satisfied clients to tap into also come with long experience in the market.
Time in the trenches also helps agents develop the sensitivity and psychological skill needed to guide buyers and sellers through complex and stressful transactions.
“There are so many options for selling a home today,” Terry said. “You can do the ‘coming soon’ thing on the MLS, or list in a traditional way and take offers, or take offers for a limited amount of time and pick the best one at noon on Monday or whatever, or do a private deal.
“If you go to the open market and create that piranha-like frenzy, you frequently get more money, but some people don’t want to have to go through that – to keep their house perfect and take out the dogs and have a million strangers traipsing through their house.”
If an older couple is ready to move to assisted living, they may prefer a simple, solid deal with a private cash buyer who will pay the asking price and give them plenty of time to make the transition.
“I give the seller the options and tell them about what the options entail and then let them decide what they want to do,” said Terry.
“Figuring out a strategy for sellers is the key to getting listings today,” said Reynolds, who currently does about 35 percent of his deals off-market.
“If they are selling a second home they don’t need, or moving out the area, it isn’t so challenging; but if they want to stay in this market, we have to talk to them the way we would to a buyer.
“Do they have their financials in order? Do they need the proceeds from the sale to buy? What terms do they need to make the deal work? We want to figure everything out ahead of time, so they don’t have to end up moving twice.”
Buyers have to be coached and coaxed, more so than ever before, because of the market’s Grand Prix pace.
“It is hard to get buyers the properties they want,” said Curley. “They need to be ready to act fast and listen to advice. If they have lost a few times and fully trust their agent, they have a better shot.”
Reynolds, Daley and other island agents expect demand for island homes to stay strong and prices to keep rising, though more slowly than in the past two years.
Daley said the economists she follows expect a 9 percent price rise in 2022, with another 5 percent gain in 2023 and smaller increases in the next few years after that for a cumulative 25 percent price gain over the next five years.
“Some buyers are starting to think they missed it, but 25 percent is not a bad return on investment,” Daley said.
