The Real Deal Miami

Ron Shuffield: Miami luxury sellers, it’s time to drop your prices

Roughly 37 percent of sellers have taken the hint, reducing prices by an average of 14%
By Sean Stewart-Muniz | November 14, 2016 12:00PM

Aerial of Miami Beach and the Venetian Causeway (Credit: Daniel Piraino) and Ron Shuffield

Aerial of Miami Beach and the Venetian Causeway (Credit: Daniel Piraino) and Ron Shuffield

No two words sound more onerous to wealthy home sellers than “price reduction.”

But with Miami more than a year deep into a housing market slowdown that’s seen sales tumble and listings linger, EWM International Realty CEO Ron Shuffield is urging luxury homeowners to face reality.

Shuffield told The Real Deal his firm has been keeping a closer eye on the luxury market since August 2015, when inventory in the $1 million-and-up price bracket began piling up amid fewer sales.

That trend culminated this year when a “perfect storm,” brewed by the bitter U.S. presidential race and Hurricane Matthew, caused Miami to suffer its worst October for luxe home sales since 2011. Only 94 houses and condos priced above $1 million sold last month, marking a drop-off of more than a third from the 145 sold in 2015.

While those forces may have been temporary, Shuffield said, sellers shouldn’t expect buyers to flock back to Miami.

The market is still contending with an inventory of 4,100 luxury homes listed for sale across Miami-Dade County. A healthy luxury market can contend with up to 18 months of supply, he said, but Miami is now grappling with nearly three years worth of inventory. That means buyers are more inclined to sit on the sidelines and shop around for deals.

“When you have inventory growing to that level and sales falling off, the major motivator to buyers is going to be an adjustment in price,” he said.

Many homeowners in Miami are already taking the hint. By the beginning of July, 37 percent of the city’s luxury listings had seen their asking prices cut by an average of 14 percent, according to EWM’s data. Shuffield said there’s still plenty of room for that number to grow before the supply buildup is reduced to a more manageable level.

Even homes owned by some of the city’s wealthiest denizens haven’t been immune from the chopping block.

Bollywood actress and businesswoman Poonam Khubani sliced roughly $1.5 million off the ask for her tri-level penthouse at the Miami Beach EDITION last month. Hedge funder Bruce McMahan shaved $4 million from his listing for an oceanfront condo on Fisher Island last week. Auto magnate Alan Potamkin has twice dropped the ask for his Coral Gables estate, most recently by $1.5 million. And Peter Fine recently cut $1.5 million off 158 Palm Avenue, a chunk of developable land he once eyed for a modern mansion.

“It’s our astute sellers that are making sales today,” Shuffied said. “We’ve even told people that if they’re not interested in selling right now, it’d be better to take their properties off the market.”