MIAMI (CBSMiami) -- A few weeks ago we reported on rents in Miami dropping. Now a similar story is playing out in the luxury sales market. Sales are slowing down dramatically and the worst may still be yet to come.
CBS4's David Sutta stepped off the elevator right into a luxury unit. On a typical day Seth Feuer's listings would sell itself. Today though, he's having to earn it.
Sutta started into a detailed tour of the property.
"You are almost purchasing a house within a condo. You have your own private elevator entrance. You walk into 3,058 square feet of living area," he says.
The views, the space, the location (South Beach's exclusive South of Fifth community) are all top notch.
"This looks like it should be sold already. Why isn't it?" CBS4's David Sutta asks.
Feuer nods his head and says "That is the billion dollar question in our real estate market currently."
What's happening is a shift in the market.
Roy Gorin owns the unit Feuer is trying to move. He explains it's been on the market for over a year now.
"It has been disappointing,"Gorin says when asked about it.
He has agreed to drop the price of his unit in the Murano Grande by nearly a million dollars. He's the lowest priced three bedroom in the building.
"Its a phenomenal apartment in a good building, in a good location. If you were a New Yorker, you would buy it in a minute because it's a bargain," Gorin says.
And yet no one is beating down his door to buy it.
Feuer admits, "This is the toughest market that I've seen. I've been in the business for about 14 years.After the crash of 2006-2007, things were tough but I still had activity."
There are a host of reasons why. Zika scared many New Yorkers off. The US dollar has strengthened, making units unaffordable for foreign buyers. And developers are adding new luxury units every day.
"It has to get worse before it gets better," Sep Niakan, broker at HB Roswell Realty told CBS4.
Niakan tracks the luxury market on his blog CondoBlackBook.com. He says the numbers show the luxury market could be on it's way down for the next few years. There are nearly 4,000 luxury units for sale in South Florida. At current sales rates, it would take five years to sell it all. In some places, it's even worse. Downtown Miami has 6 and half years of luxury inventory. In Midtown, the number stands at 8 years.
He's advising clients to get real quick.
"If you want to sell within the next couple of years, do it now," Niakan said.
That's exactly what developers are trying to do.
Related Group, builder of a number of Miami luxury condos, has started offering an unheard of 10% commission to realtors on certain luxury projects. In other words, sell a unit, get a quarter million dollars. When asked about it, Feuer pauses. He hints developers may not like him for what he's about to say.
"It signals to me that they are having a hard time making sales and I try to steer my clients in the right direction," said Feuer.
It has sellers like Roy, shaking their head.
"I think there are unrealistic sellers. There is an apartment on the 23rd floor, priced $3 million dollars more than this," Gorin said.
Sep expects reality to sink in for luxury sellers in the next year or so. For those who can't accept it, he says wait it out, that Miami always bounces back.
"The future of Miami is very bright. Everyone who asks me what to do, I tell them if you can wait it out five years you are going to be happy you did," Niakan said.
So far, much of the seller pain applies to luxury real estate which is stuff that is over $600,000. All that real estate listed between $200-$500 thousand dollars continues to move as that what most local buyers are searching for.
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