Robin Sheakley, a fourth-generation leader of one of the largest real estate firms in Cincinnati, received a text from a good friend in Ohio one recent evening. The message: Can you help us buy a house in Sarasota?
The timing was coincidental yet fortuitous.
The president of Sibcy Cline Realtors, Sheakley happened to be in Sarasota when she received the text. Not only that, but when the text arrived, she was at a dinner party hosted by her friend and one of the most prominent real estate entrepreneurs in the region, Michael Saunders, founder of Michael Saunders & Co. Both Sheakley and Saunders say that text exemplifies the pipeline that continues to feed Sarasota and other areas on the west coast of Florida with new homebuyers — even as the overall real estate market shows some signs of weakness.
Sheakley and Saunders, joined by four other realty brokerage leaders from around the state and country, spoke about the real estate market during a media session April 26 at The Ritz-Carlton, Sarasota. The leaders were in Sarasota for a conference hosted by The Realty Alliance, a network of elite real estate brokerages across North America. Saunders invited the leaders, from Cincinnati, Chicago, Miami, Milwaukee and Naples, to speak to local media on the state of their home markets, what they see happening in Florida and other trends. Highlights from the conversation include:
Sheakley says her company’s transaction volume in 2023 is off 35% in Ohio, mostly because of an acute lack of inventory. The other panelists echoed the inventory struggle. Stephen Baird, president and CEO of Baird & Warner in Chicago, says listings of homes for sale are down 50% at his firm. “We just don’t have the homes to sell, but we have almost unlimited demand,” says Baird, whose company, founded in 1855, is billed as the oldest independent family-owned real estate services company in the U.S. and the largest independent real estate brokerage in Illinois.
While challenges in addition to inventory persist — the economy, insurance — all the executives on the panel agree that Florida remains a hot spot for homebuyers.
Ron Howard, vice president of sales for John R. Wood Properties in Naples, says in Southwest Florida that’s often seen in buyers seeking second, or additional, homes or condos. “They are coming here for the weather and the active lifestyle,” he says, as opposed to leaving another place for negative reasons. (John R. Wood Properties is one of the largest residential brokerages by volume in Southwest Florida. It handled 993 transactions, including a $46.8 million-dollar sale, in the first quarter of 2023.)
Like Howard, John Horning, executive vice president of Shorewest Realtors in Brookfield, Wisconsin, outside Milwaukee, says he’s been seeing more dual owners. That’s clients keeping condos in Wisconsin and buying another condo in Naples or other parts of Florida.
Baird sees the same trends, though he adds that he believes the national stories of people fleeing Chicago and Illinois are a bit oversold — despite statistical evidence backing the trend. (More than 140,000 people left Illinois for other states in the last two censuses, federal data shows. In addition, a 2022 annual migration report from Allied Van Lines and real estate tech firm Zillow found that Illinos was No. 1 in the country in migration out of the state, and Chicago was the No. 1 city nationwide in outbound moves.)
The Florida pipeline is so strong, Baird acknowledges, he recently opened a Florida office, in Naples, for his first Sunshine State expansion. It also marks the company’s first expansion outside the Chicago area. Baird says he wasn’t inclined to expand, but 20 to 30 agents with his firm, which closed nearly $8 billion in sales volume in 2021, said they had relationship-based opportunities they didn’t want to miss out on in Florida. Baird & Warner now has 23 agents covering Florida, and is active in six Florida MLS networks, according to a report in Real Estate News.
Michael Pappas, president of The Keyes Co., based in Miami, says one factor in the Florida real estate pipeline remains a near-certainty: People in the Midwest (Interstate 75) tend to come to west coast of the state while Northeasterners (Interstate 95) tend to go to state’s east coast. An in-state footnote to that, adds Pappas: South Florida is getting so crowded, some people are buying homes in Ave Maria, 90 miles west on Alligator Alley, and commuting to Miami-Dade or Broward counties.
Even with reforms to the state’s out-of-whack insurance market, the lack of affordable insurance remains an obstacle for some homebuyers. Pappas, whose firm has in-house mortgage, title, insurance and property management divisions, says 80% of his company’s clients are insured by Citizens Property Insurance Corp. because no other companies will write the policy. Pappas cites his own Miami-area house as an example of the high costs, where he’s paying $85,000 this year for insurance on a home valued at $3.5 million.
One unusual solution: Some South Florida buyers The Keyes Co. has worked with in the higher price ranges, says Pappas, have simply decided to punt on insurance. They paid cash for the home, so there’s no legal requirement like there is with a mortgage, to have insurance.
Several panelists say they are telling clients the days of 3% or 4% mortgage rates are gone — maybe for good. Taking a historical look, Pappas says even at 7.1%, the current fixed-year rate is better than it was for at least 40 of the past 50 years. “There is a shock factor,” when buyers realize the rates are higher than a year or two ago, he says, “but we tell them this is the new normal.”
Sheakley shares that view, reasoning mortgage rates aren’t forever and you can buy now and refinance if/when rates go down. “There’s a saying in real estate,” Sheakley says, “that you date the rate, but you marry the house.”
The biggest trend the real estate executives see in all markets is more space. That goes for backyards, lanais, pool areas and even ceiling heights. It also includes better use of space, such as replacing French doors for sliding doors. Pappas and Howard say the Mediterranean look in Florida, such as homes with red tile roofs, is out. Modern is in. “The outdoor lifestyle is very hot,” Howard says.
Founded in 1976, Michael Saunders & Co. has 20 sales offices and more than 600 agents spanning Sarasota, Manatee and Charlotte counties.