Fueled by friendly tax policies and numerous business relocations during the pandemic, Florida has enjoyed booming growth and expansion in 2022. Real estate experts, however, are weighing the strength of the market against growing uncertainty and fears of a looming cooldown. At Cotton & Company, President Laurie Andrews is keenly aware of how quickly market trends can shift. With over 40 years of marketing experience exclusively in real estate, the company’s data-driven approach focuses on how conditions are impacting homebuyers’ decisions in real time. Let’s chat with Laurie Andrews and hear her unique perspective on the future of luxury real estate in Florida as we head into 2023.
With the pandemic over, where do you see potential opportunities for growth, or the greatest challenges, for Florida’s real estate and construction sectors?
“Florida is a bright spot for the country for a variety of reasons. We still have great weather which makes for a high quality of life. In the post-pandemic world, we continue to see buyers prioritizing how they spend their time, especially at the upper end. The luxury market is the driving force for the state’s economy, and this segment is less impacted by interest rates. The Florida lifestyle remains their driving factor. Demand for golf has never been higher, and most private clubs have waiting lists for Membership. Most of them have also had significant increases in entry fees and dues.”
“Construction costs continue to rise due to labor and supply chain issues. That will continue to push pricing higher for all real estate segments. Even if the land was free, the cost of building in today’s environment makes it difficult to achieve affordable housing objectives. Renovations or expansions of existing homes are likely to surge due to the shortage of inventory. We are seeing the days on the market lengthen, but still below traditional levels.”
Tesoro Club Palmer Course, Port St. Lucie, Florida
While there are some preliminary signs that the market may be cooling, what will it take to have truly affordable, accessible housing?
“The market cooling has largely been a sign of less inventory and lower transaction volume. We still have tremendous influx from the north due to overall market conditions – lower taxes, less crime, more freedom. The luxury segment still has strong indicators. Cotton & Company manages digital marketing programs and websites for a dozen communities, and our website volume has always been an early market indicator. We have seen minimal fall off from traffic this year, largely due to having fewer listings pulling traffic. Our online registrations for information from the traffic we are getting have seen an increased conversion rate, meaning the traffic we are getting are actively ready to make the move.”
“With construction materials and labor costs at an all-time high, it’s difficult to see affordability in any NEW development projects. Affordable housing may need to be addressed by converting existing properties or outdated hospitality into multi-family rentals or for-sale residential. This in-fill approach will provide more affordable housing in closer proximity to commercial centers. Public transportation providing access is a core principle in meeting the affordable housing objective.”
How has the Palm Beach County’s development specifically highlighted the challenges of increased urban sprawl, even as the market continues to run up against natural barriers – the Atlantic to the east and Everglades to the west – that limit future growth?
“Geography definitely plays a role. We have traditionally seen homebuyers move north to new markets, and then west. In the past 10 years, the retiree market has been driven to Martin and St. Lucie County to the north to find affordability. We’re now seeing tear downs on the coast to make way for new buildings, which in turn creates new opportunities in the surrounding community. With the population surge, we’ve also seen a tremendous increase in traffic. Homebuyers are definitely focused on having access to airports, retail, medical, and other key services, so our transportation routes are becoming increasingly important.”
The Island at West Bay Rooftop Amenity Deck, Estero, Florida
How are the high-net-worth individuals entering the market driving the demand for higher quality homes and development? How is this changing the nature of the market itself in terms of competitiveness and cost?
“Florida has been the beneficiary of a surge of migration. Not just from businesses relocating or retirees but working professionals who now have the option of working remote. To be competitive, many developers are integrating a more robust service atmosphere into their amenity plan. It’s not just about providing spaces. We are providing conveniences that allow high net worth individuals to maximize their enjoyment in their down time.”
“All of these services also come with a cost, so the challenge is finding a way to use technology to minimize the cost of security. We’re now designing buildings with package storage areas built in. Places with refrigeration or heating for acceptance of groceries or meal delivery. We’re seeing communal work spaces being created to provide business services within the private building. And there is an expectation in every development plan, from entry level to luxury, to have easy access to fitness centers, family gathering spaces, outdoor parks, and other wellness components. And of course, everyone knows – you have to have PICKLEBALL!”
Boca West Country Club Pickleball Courts, Boca Raton, Florida
Overall, what do you see as the key opportunities, or challenges, to the Florida real estate market moving forward?
“Florida is positioned well for the long term, and we look forward to seeing a leveling out of the market to a healthy volume. Although we may see a bit of a market correction, it isn’t like 2010. This past surge has been driven by end users making a lifestyle decision. The past real estate crash was based on speculators who overheated the market. That’s not the same situation we’re seeing today.”
About Laurie Andrews and Cotton & Company
Laurie Andrews is the President of Cotton & Company, a full-service digital marketing firm grounded in over four decades of experience in the real estate market. The company has driven sales success for over 1,700 communities worldwide, including private country clubs, luxury condominiums, resort residential, marina residences, and master-planned communities. Visit CottonCo.com to learn more about their full scope of services which range from branding and website development to sales support, lead generation, and digital/social marketing.