Major Southwest Florida Real Estate Players Ready to Slug it Out in Slower Market

The dominant pair fighting for the top spot in the Southwest Florida real estate market has, for many years, been Michael Saunders & Co. and Coldwell Banker Residential Real Estate.

But an unprecedented real estate boom and the deluge of high-end condo projects in Palmetto, Bradenton and Sarasota that came with it led to competition from different players. Sarasota is often identified with smaller, pricier sister city, Naples, and it’s from that Collier County community that some of the recent high-end interest is coming.

Naples-based Premier Properties, which does about $2 billion in annual sales, is opening a major Sarasota office this autumn. It already is in negotiations to open a second spot as well. Downtown Sarasota (below, right) has become a battlefield, as one of the company’s first moves was to snare a top Saunders executive to run its new operation.

It doesn’t stop with Premier, either.

Others have entered the Sarasota-area market, making for what could be a very interesting several years in the post-boom world of residential real estate. The rush of 2004-05 might never be seen again, but firms are already gearing up for what is expected to be the arrival of millions of baby boomers figuring out where they want to spend their golden years.

Some of the others jockeying in what promises to remake the region’s real estate field are Plantation-based Florida Prudential WCI, a $5 billion giant, Prudential Palms Realty, the Southwest Florida market’s 4th-largest player, and Cape Coral’s Century 21 Sunbelt Realty, with about $2 billion in annual transactions and the No. 1 Century 21 affiliate in the nation.

For now, at least, Michael Saunders & Co. remains the undisputed champ of Florida real estate in the region. As a stand-alone company, Saunders ranks as the 48th largest Realtor in the nation. In the annual edition of Real Trends 500, an independent realty industry survey, Saunders was listed as closing on $2.91 billion worth of property in 2005, or about 5,300 sales.

How great is this one firm’s portion of the Southwest Florida market? Saunders lays claim to “capturing 23.6 percent of all sales in Sarasota County and 14.58 percent of all sales in the tri-county area from Manatee to Charlotte. In order to maintain that position, Saunders (the individual) intends to continue recruitment, training and new-territory development.

He agrees that the days of 20-40 percent annual appreciation are over. In 2005, Saunders grew by 19.5 percent from 2004, with about 20 percent of that growth coming from new home development sales, a market that has taken a beating so far this year. Saunders expects new homes to amount to only 5 percent of total sales in 2006, as rising costs of Florida home loans put a damper on demand.

Coldwell Banker, meanwhile, is the state’s largest Realtor, yet plays second fiddle in Sarasota, its own Sunshine State corporate home, to the aforementioned Michael Saunders & Co. In the Real Trends 500 report, the 22-office strong Coldwell Banker reported $2.1 billion in closed local volume, or about 5,204 transactions.

“If our sales volume were looked at independently of our parent company NRT, our results would place us among the top four brokerage companies in the United States with over $23.3 billion in closed sales volume for 2005,” said Budge Huskey, President and CEO of Coldwell Banker Residential Real Estate Inc.

Following the big guns are some other companies worth keeping an eye on for future growth or consolidation as some brokers feel the pinch of the market decline. Century 21 Advantage has 120 sales associates in three offices and posted $343 million in closings in 2005. Some of Keller Williams Realty’s regional offices, meanwhile, are merging under new International Equity Venture ownership.

What does it all mean? Given the cooling Florida housing market, the 2005 sales results will likely serve as the high water mark for most firms. As for the rest of the year…

• Expect intense competition on all sides for market share, especially in the lucrative ultra-luxury market, which is less susceptible to shifting market conditions such as energy costs and rising insurance premiums that take their toll on first-time buyers.
• Expect migration from inside developer sales to general real estate sales among top agents as the new home market stagnates.
• Look for increased concentration of real estate services in the hands of Realtors that are affiliates of huge developers, and for some local independent brokers to officially enter development waters.
• Don’t be surprised to see headhunting among the top Realtors, as well as a drop-off in the total number of active Realtors.

Last but not least, many Realtors report — off the record, of course — that we can expect an across-the-board push to convince sellers to lower prices and to provide real estate appraisals, inspections and guarantees to get the glut of current inventory off the market. Oh, and no one is matching last year’s performance. No way.