Richard Swerdlow saw early on, in 2005, that there would be oversupply. A developer at the time, he sought to build on the opportunity and started the US Condo Exchange, an online market to buy and sell condos modeled on the stock exchange and intended as a transparent place to allow buyers and sellers to connect with one another. The company later acquired the domain Condo.com. Miami-based Condo.com has seen double-digit revenue increases for the last four years, and with more than one million in the United States and abroad, it’s the largest condo database in the world. It is also a real estate brokerage licensed in several states, including New York and Florida, and gets commissions on sales originated through the site. The Real Deal talked to Swerdlow about how he created the site, how it works, and what recent traffic on the site indicates about the future of the Florida market.
How does Condo.com work?
We wanted to connect buyers and sellers. So in addition to there being listings, a buyer or renter can directly contact the seller or the landlord or the developer of that listing. We also created a platform for reviews, similar to hotel sites, where you can go and read a review about a particular building that you may move in to. We’ve built a significant amount of sales data that, unlike single-family home sales data, which is really easy to come by, it’s much more challenging to aggregate and display condo sales data, which we’ve now done on a nationwide basis. So you can search for any building, find that building, see all available units for sale and for rent, and see all the sales history in the building.
Where do you see the Miami real estate market going?
We’re seeing the markets start to pick up. Traffic is up 75 percent March over March, and I think a lot of that has to do with people getting back into the game again, thinking the prices have bottomed out. You have lenders stepping back into the market making loans, the extension of the first-time home buyer tax credit
You predicted that there would be oversupply in the housing market. What made you realize the crash was imminent?
The real key was what I like to call the “landscaping test.” Back in 1999, when my gardener told me to buy some tech stocks, I knew the end was near and there was a bubble in the tech boom. Now, fast forward to 2005, my gardener was asking me about buying pre-construction condo units, I knew the end was near and we were at the top of the bubble.
How do you think Miami real estate will fare over the next year?
I think it’s [generally] going to be a slow, steady move off the bottom. In Miami, downtown or on Brickell Avenue, a bunch of buildings have dropped prices to a $200- to 225-per-square-foot price, and there was an immediate uptake at those prices. So what was happening was a lot of the developers and banks thought that a lot of inventory was going to be sold in bulk. I think they sort of changed that idea and realized that there’s a user/buyer out there and they don’t have to completely take a haircut on their prices.
Do you see brokers being replaced by websites as more sales move online?
No, absolutely not. What I see moving online is lead generation and advertising dollars. I think because a buyer has all these tools at their disposal online, and the National Association of Realtors says over 90 percent of people start their search online, we’re seeing a giant shift of ad dollars and lead generation for real estate taking place online. At the end of the day, real estate is a local business, with the exception that people were buying condos site unseen during the boom. I think to a certain extent condos are commoditized, and you can buy them site unseen, but [with] more traditional single-family real estate in general, brokers are a very critical component to consummating a real estate transaction.