The Real Deal Weekly Dirt: Luxury Market Paradox

What’s going on with the luxury residential market? 

Brokers, buyers and sellers across South Florida are in a paradoxical situation. Despite the continued slowdown, sales are still setting records. Look no further than billionaire Jeff Bezos and acclaimed DJ David Guetta’s recent purchases in the wealthy enclave of Indian Creek. Bezos set an island record with his $68 million purchase, while the property Guetta is in contract to buy was asking $69 million. 

Price cuts are ubiquitous, but that doesn’t mean it’s been easy for agents. Successfully closing some deals is like “pulling teeth and nails,” Dora Puig, owner and broker of Luxe Living Realty, tells me. 

And the fact that records are still being set doesn’t really help agents convince their sellers to accept below-ask offers or reduce their prices. 

But it’s not just the Bezoses and Guettas of the world buying. 

One indicator that demand is still there? Private school enrollment, which is at unprecedented highs, my colleague Kate Hinsche reports. That’s thanks to the influx of wealthy residents from the Northeast and California. A recent change in Florida law also makes all families in the state eligible for school vouchers, which provide up to $8,000 in scholarships they can use at private and charter schools. 

Some brokers are losing deals because their clients’ kids aren’t getting into their schools of choice. Instead, these families are buying homes wherever their child gets admitted. While some new schools are in the works, the supply will not meet the demand. 

What we’re thinking about: A real estate agent who was pretending to be a developer was sentenced to more than three years in prison for PPP loan fraud. In her statement, she said, “everybody was doing it.” Who else was doing it? Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Rapper and producer Rick Ross closed on his $35 million purchase of the waterfront estate at 37 Star Island Drive in Miami Beach. Longtime Oracle executive Yale Brown, now managing partner of Columbus Ventures, sold the home. 

Commercial: A partnership led by longtime South Florida real estate investor Evelyn Greer sold the Shadowood Square shopping plaza near Boca Raton for $88.4 million to Edens. The 261,000-square-foot plaza at 9789 Glades Road is in unincorporated Palm Beach County. 

— Research by Adam Farence 

NEW TO THE MARKET 

John Jansheski, founder of DenTek and the son of the Dental Pik inventor, re-listed his waterfront estate at 27 Star Island Drive for $68 million. The nine-bedroom, nearly 20,000-square-foot mansion includes “an industrial glam kitchen suited for a Michelin chef,” according to the listing. Say no more? It’s on the market with Dina Goldentayer of Douglas Elliman. The property was previously asking $90 million. 

A thing we’ve learned 

Microwaving plastic is really bad — even plastic considered safe to use by the FDA. Containers can release billions of nanometer-wide particles into the food being microwaved, according to a study from University of Nebraska-Lincoln. 

Elsewhere in Florida 

• A Trump-appointed judge said Florida’s near ban on Chinese real estate investment in the state can stay in place as a lawsuit challenging the new law moves through the court. U.S. District Judge Allen Winsor rejected attempts to place a preliminary injunction on the law, Politico reports. 
• Even the world’s greatest soccer player Lionel Messi has a problem with South Florida’s humidity. At his first press conference since joining Inter Miami, Messi said: “one never completely adapts to this climate,” according to the New York Times. 
• The Live Local Act, sweeping affordable housing legislation that Gov. Ron DeSantis signed into law this year, is facing backlash from some elected officials over an aspect of the law that overrides local zoning laws regarding height and density, the Miami Herald reports. 

Mainsail Insurance Company, based in Texas, plans to begin doing business in Florida, according to the Florida Office of Insurance Regulation. The property insurance crisis in Florida has worsened due to high rates and insurers limiting their exposure in the Sunshine State. But Mainsail marks the second company to expand to Florida following the passage of insurer-friendly legislation.