Florida Luxury Home Sales Are Surging — But That Doesn’t Mean You Should Guess at Value

Florida’s luxury real estate market had a strong July, with sales of million-dollar homes posting significant year-over-year gains.

According to Florida Realtors® in the article Florida Luxury Home Sales Post Strong July Gains by Amy Connolly, closed sales of condos and townhouses priced at $1 million or more increased by more than 31% compared with the previous year. Sales of single-family homes above $1 million increased by more than 27%.

That is good news for Florida real estate.

But a strong market does not mean every property is worth whatever a buyer is willing to offer—or whatever a seller hopes to get.

In fact, when large amounts of money are involved, knowing the property’s market value becomes even more important.

Paying Cash? An Appraisal Can Help You Avoid Overpaying

One of the interesting points in the Florida Realtors® article is that luxury buyers tend to be less sensitive to mortgage rates. Many are paying cash, making substantial down payments, or using equity from other properties.

If you are paying cash, there may be no lender requiring an appraisal.

That doesn’t mean you shouldn’t get one.

A lender orders an appraisal partly to protect its investment. When you’re paying cash, you’re the one assuming the risk.

Before committing hundreds of thousands—or millions—of dollars to a property, an independent appraisal can provide another layer of due diligence.

The question isn’t simply:

“Can I afford this house?”

It’s also:

“Does the market support what I’m about to pay?”

A competitive market, unique property, waterfront location, luxury improvements, or emotional attachment can make it very easy to justify a higher price. An independent appraiser approaches the property from a different perspective by analyzing comparable sales, market conditions, location, condition, quality, and other factors that influence value.

Spending a relatively small amount on an appraisal before making a major cash purchase could help you make a much more informed decision.

Selling For Sale By Owner? Don’t Guess at the Asking Price

If you’re selling your property without a real estate agent, determining the right asking price can be one of the hardest parts of the process.

Online estimates can vary dramatically. Neighbors may tell you what they think the house is worth. You may see another home listed for a certain amount and assume yours should be worth the same.

But asking prices aren’t necessarily market values.

A pre-listing appraisal can provide an independent opinion of value before the property hits the market.

That can help a For Sale By Owner seller establish a more supportable asking price instead of starting too high, sitting on the market, and eventually chasing the market downward with price reductions.

Using a Real Estate Agent? An Appraisal Can Still Be Valuable

Real estate agents provide an important service and generally prepare a comparative market analysis when helping sellers determine a listing price.

An appraisal can provide another independent perspective.

This can be particularly helpful when the property is unusual, highly improved, located in a luxury market, has limited comparable sales, or when the owner and agent have different opinions about pricing.

It can also give sellers additional information when making one of the biggest financial decisions they may ever make.

A strong Florida luxury market is great—but even in a strong market, pricing still matters.

Is Your House Sitting on the Market?

Sometimes the market gives you an answer you don’t want to hear.

If your property has been actively marketed, buyers are seeing it, showings are occurring, but offers aren’t coming in, price may be part of the problem.

That doesn’t necessarily mean the property isn’t desirable.

It may simply mean there is a disconnect between the asking price and what today’s buyers believe the property is worth.

An appraisal can help take some of the emotion out of that discussion.

Instead of asking:

“How much should we reduce the price?”

A better question may be:

“What does the current market actually support?”

An updated appraisal can analyze recent sales, competing properties, current market conditions, and the characteristics of your property to provide a more objective starting point.

Strong Markets Still Require Smart Decisions

Florida’s million-dollar market may be posting impressive numbers, but higher sales activity doesn’t eliminate the need for careful valuation.

Whether you’re:

• Paying cash for a home and want to make sure you’re not overpaying
• Selling your property For Sale By Owner
• Working with a real estate agent and want an independent opinion of value
• Trying to determine why your property isn’t selling
• Buying or selling a unique or luxury property

Empire Appraisal Group can provide an independent real estate appraisal to help you make a more informed decision.

Because whether a property is worth $300,000, $1 million, or several million dollars, one question always matters:

What is it actually worth?

For What It’s Worth,

Empire Appraisal Group

Call 561-441-9298 to discuss your property or schedule an appraisal.