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Residential sales shift to Virtual Reality

March 31, 2020
From left: Edgardo Defortuna, Stephan Burke, Ron Shuffield, Ana Bozovic, Carol Cassis, and Mark Zilbert

Early this month, a buyer in Germany bought a Miami Beach house without ever setting foot in it. The $750,000 cash deal was done entirely using FaceTime and e-signature technology. It closed on March 11, the same day that President Trump imposed a 30-day travel ban from Europe and the World Health Organization declared coronavirus a pandemic.

The agents involved in the sale of the bayfront Normandy Shores home said the showings, inspection, and walk-through were all done virtually because the buyer purchased it as an investment and “didn’t need to see it.”  This sale is proof that deals can not only close virtually, but the whole process can be done online.

Virtual deals

In the case of the Miami Beach home, though the buyer was not physically present, the agents were there. Someone had to show the house – multiple times so that the buyer could see how the lighting hits at sunset – and during the inspection and walkthrough, Burke and Cassis said.

With FaceTime, buyers and agents can communicate in real-time, said Ott. “Clients can ask questions. ‘Can you go into that bathroom again? Or, ‘Can you show me that closet again?’ It’s very real.”

The Normandy Shores home (Credit: Douglas Elliman)

Developers of luxury condos are also joining in on the virtual world. At Ritz-Carlton Residences, Miami Beach, Lionheart Capital is offering tours via FaceTime, as is 57 Ocean in Miami Beach and Ritz-Carlton Residences in Sunny Isles Beach.

The Estates at Acqualina in Sunny Isles Beach, which is under construction, is providing virtual tours of the model residence, walk-throughs, digital presentations and FaceTime conferencing with the sales team.

OKO Group is among the developers tapping into technology. At Missoni Baia in Miami’s Edgewater neighborhood and at Una Residences in Brickell, the developer is offering full video tours of the sales gallery and amenities, via YouTube, virtual meeting scheduling with agents, and online access to the floor plans for the projects under construction.

Find me a deal

Amid the pandemic, fewer buyers made offers last week, according to Berkshire Hathaway HomeServices EWM Realty President Ron Shuffield. Yet, he said the company’s sales volume increased 30 percent from the previous week, likely due to buyers and sellers rushing to close due to coronavirus.

Shuffield does not anticipate a drop in property values, but acknowledged that there will be opportunities for buyers, comparing the health crisis to a nationwide hurricane “with no end in sight.”

Mortgage money in flux

Meanwhile, Centennial Bank, an Arkansas-based community bank with branches in Florida, is still closing new loans but it’s “becoming more and more difficult to do business,” according to David Druey, Florida regional president.

Lending is still happening, with some lenders able to do remote closings, according to some developers. Yet overall, Jaramillo said the market is not set up for it.

Cycle shifts

Ana Bozovic, founder of real estate data firm and brokerage Analytics Miami, believes that coronavirus “has created an inflection point, and we are now in the early stages of this cycle’s decline.”

Bozovic is referring to the $500,000 and up condo market. “The higher up in price, the worse it is,” she said.

In January and February of this year, luxury condo sales (defined as $1 million and higher) in Miami Beach fell 53 percent compared to the same months of last year. At the end of February, the Edgewater market had 89 months of inventory of condos priced at $1 million and higher, based on two sales this year and 163 active listings, according to Bozovic’s data. In Sunny Isles Beach, there were 80 months of supply of $1 million-plus condos.

The silver lining? Sellers are already discounting their units, she said. A penthouse, unit 5103, at Gran Paraiso in Edgewater is listed for just under $2 million. The owner bought it from the developer for $2.56 million in April 2019, which means that at the current asking price, the seller would be losing 22 percent, before commissions.

“It’s a genius move to buy real estate at the bottom. Especially in times of uncertainty, real estate has value. Miami is a wonderful, beautiful place. The opportunity for that is coming,” she said.

“There are going to be some opportunities in some cases where the developers or unit owners need to sell,” he said, adding that the developers his firm is representing are not slashing prices.

Price cuts will depend on the sellers, said Mark Zilbert of Brown Harris Stevens Miami. He doesn’t predict that pricing will drop, but said some sellers may find themselves with less cash reserves due to declines in the financial markets, and will be forced to sell their second or third home.

“I don’t think buyers are afraid of Florida,” Zilbert said. “I have been busy. I speak to buyers every single day.”

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