South Florida’s Resi Agents Squeezed by High Prices

At an industry event held in North Bay Village, an agent mentions that one of her colleagues recently moved his family to Texas. The cost of living pushed him out of South Florida, she said. In Texas, he could rent a whole house for him and his family for around $3,000 a month. Depending on the neighborhood, the same in Miami could cost double, triple or even more than that. 

The people selling South Florida’s housing boom are getting squeezed by it, too. 

That colleague isn’t alone. A number of real estate agents are struggling to make it right now in South Florida. The inventory of in-demand luxury properties is low and high interest rates are keeping regular buyers on the sidelines.

“Clients are getting hit with high interest rates, sellers think that we’re in Covid-era prices and that’s just not the reality,” said an agent with Coral Gables-based Luxe Properties.

While a seller may be able to wait it out, their agents can’t put off getting paid. In many cases, the agents have already spent money on additional costs such as photography and staging. 

The market threatens to get even trickier, as Fannie Mae and Freddie Mac’s crackdown on condo financing adds strain to sales in older condo buildings, prolonging the selling process and creating even more time between commission payments. 

Adam Vellano, managing director and principal broker in Florida for Compass, said Compass hasn’t lost many agents (the brokerage’s parent company also just got a lot bigger due to the merger with Anywhere Real Estate), but he is hearing from other brokerage owners that agents have exited the industry. 

While this is normal in any challenging part of a real estate cycle, agents and brokers say it’s different this time around. The widening wealth gap that’s brought so many billionaires and multimillionaires to South Florida has raised prices so dramatically that many agents can’t afford to keep being agents. It’s very clearly separating the winners from the losers. 

“Some agents are killing it. Some agents are struggling,” Vellano said. 

While the headlines focus on the monster deals at the high end, only a handful of brokers control that market. 

The struggling ones are tapping into their Plan Bs: In addition to heading for cheaper states, they are leaning on commission advances or second jobs. 

The wealth paradox

While the “regular market” contracts, we’re also witnessing one of the greatest migrations of wealth South Florida’s ever seen, keeping the few top agents who have been involved in their home purchases right at the top. 

Billionaire tech founders like Mark Zuckerberg, Larry Page, Sergey Brin and Jeff Bezos (worth a collective $1.2 trillion) and others have all spent lavishly on waterfront homes in Miami in recent years. 

The agents on their deals live in the communities they sell, mostly Miami Beach, though not all are in waterfront homes. Some have personal drivers; all of them rely on their teams to help keep the deals flowing. Some are spending more of their summers traveling in Europe, like their clients.

Yet even they may never approach the actual lifestyles of Miami’s new rich and famous.