In July, Inman gazes at the glitter and glam of the luxury real estate market. Snapshots of the country’s top luxury markets, advice from leading agents, features on what affluent homeowners want now and a breakdown of the top sales of 2023 (so far) are all in the cards leading up to Inman Luxury Connect, Aug. 7-8 at the Aria in Las Vegas. Make plans to join us now.
Those real estate pros following the pulse of the industry may know by now the story of Jonathan Spears, team leader of the Spears Group at Compass.
The wunderkind from Destin, Florida, enrolled at Florida State University as a young teen before he could legally drive a vehicle and completed his degree in Business Administration by the time he was 19 years old.
Jumping into real estate post-graduation, Spears started off in foreclosures, then decided to transition into the luxury sector and quickly became a leader in his market.
A few years later, Spears formed his own real estate team. In 2022, the team closed $320.68 million in transactions, making them the No. 16 medium-sized team in the U.S. and the No. 3 team in Florida, according to RealTrends The Thousand rankings.
In advance of Spears’ appearance at Inman Luxury Connect on Aug. 7-8, Inman spoke with him about what’s going on in his market and what he’s looking forward to at Connect this year. Here’s what he had to say, edited for brevity and clarity.
Inman: What’s the biggest thing happening in your market right now?
Spears: It’s been interesting because we’ve watched markets recede from their all-time highs really across the country. The messaging for sellers and for buyers, in our market specifically, has basically been ‘You haven’t missed the market.’ For a seller especially, we’re seeing record sales happening. For example, we closed the most expensive sale in North Florida about 60 days ago at $19 million, and it was an all-time high for our market in that specific town, which is Seagrove Beach, Florida.
We’re still seeing some really incredible activity. It may not be at the same absorption rate. So the frequency of transactions, especially over $5 million, which is kind of the market that we serve most actively, has slowed down by almost 50 percent. But the average sales price is still significantly up, which is exciting.
So if sellers can just hang in there, you’re saying it could turn out really well for them.
For sure. And buyers have a lot more options than they did, but we’re not back to pre-pandemic inventory levels. So that’s been great for somebody who wants to come into the market and then also really good news for a seller, especially in any market buyers are looking to invest in something that’s unique and well-positioned. We always say, ‘Location, location, location,’ but right now especially, I think the desirability for that trophy property or that highly unique listing is at an all-time high.
We actually just had a listing of ours go completely viral on TikTok and Instagram. It’s a $22 million house that ended up with just over 15 million views between those two platforms in the matter of about a week. So it’s really exciting.
And it’s funny. I’ve had people reaching out to me from all over the country asking me like, ‘What is this area? Tell me about this market.’ And it’s kind of crazy, because our market, the inception of it was really, especially on the luxury side, the early 2000s. So we’re only about a two-decade-old luxury market.
And when you compare that to like South Florida that’s been developing since the early 1900s, there’s really kind of this new emerging side of Florida that’s become very prominent, so we’re just really glad to be positioned here and able to serve that upper end of the market.
I can imagine. What was it about the listing that you think made it go viral?
What’s really amazing is obviously it’s priced on the higher side at $22 million. It’s one of the most expensive listings in the market, and it really [earns] that level of pricing and it was purpose-built to kind of maximize a beachfront positioning.
It has just over 70 feet on the Gulf of Mexico and a linear edge infinity pool that’s on the second story that is unbelievable, so the views are literally 180 degrees of white sand beach, emerald green water, and that’s pretty much what captivated the audience and why it racked up so many views so quickly.
Sounds beautiful. Since your market is traditionally a destination for summer travel and second homes, have you and your team been gearing up for a lot of increased market traffic?
Absolutely. We are in our prime season right now. In fact, Fourth of July week is one of the busiest weeks of the year. And it’s really the opposite trend from South Florida — South Florida is a major winter market. North Florida is a major summer market, mainly because we’re such an accessible drive-to destination.
About a third of the U.S. can drive here within a 10- to 12-hour time frame, so a lot of folks drive in, they’re able to park in one of our New Urbanism communities and they really don’t have to get in that car again. They can walk to incredible shopping, they can walk to some of the best restaurants in this area and also the beautiful beaches, which is what draws this type of crowd.
The other thing about our market that makes it so dynamic is that 95 percent of our sales are second, third, fourth, fifth homes, but a lot of folks are purchasing these houses to leverage for short-term rentals. We don’t have the type of regulatory environment that other second-home destinations do when it comes to short-term rentals, because we don’t really have a ton of hotels.
There’s so much state and federal preserve land here that minimized major coastal development. And we also have a 50-foot height restriction for all commercial and residential buildings in Walton County, so it’s really preserved that high density and has made single-family homes the most attractive option for travel.
I didn’t realize that. Speaking of all the beautiful beach towns you have, I saw that Alys Beach received some good press in the Wall Street Journal recently due to the community’s soaring demand as more people learn about its characteristically pristine, white houses and walkable streets. What do you make of that? Do you think it will see an even larger upswing in popularity now?
Absolutely — it’s already started. That article ended up being the most-read article on our website for the first 48 hours it was posted. And that’s not just in our real estate section — it was the most-read article website-wide.
We were not only thrilled to expose such a dynamic luxury market at a national and international level, but also to really tell the story of this iconic beach town. So we’re already seeing quite a bit of interest, not only in Alys Beach, but how that article has funneled people to this area that may be in New York and they’ve never considered Northern Florida, or they may be in California and just did not know that this existed.
I actually talked to a couple the other day that was looking at purchasing in Cabo, and because of that article about Alys Beach, they reached out and said, ‘Oh my gosh, this architecture — we’ve never seen anything like this.’ And we were able to kind of convert them to interest in this area as opposed to an international destination like Cabo, which was really exciting.
It also added a lot of interest to our listing in Alys Beach. We’ve got one of the most expensive homes on the market at $12.5 million, and it immediately had an uptick in showings.
Fantastic. So as you move into a new summer season, what sorts of things are you prepping your team for? Is there anything new you feel you have to do this year to meet the market?
I think in years past we had such a strong level of demand as the market just absolutely surged, it was like you took the eye of the nation and it really turned to these amazing second-home markets, and our market truly benefited from those pandemic-fueled activities.
I think what’s been really exciting about — I don’t want to call it a slowdown — but what’s been exciting about the market shifts that we’ve experienced where you’ve had a little bit more inventory and prices have stayed the same, is it’s given us time to focus on the relationships that we have with the people that we serve. So what I’ve been really preaching to our team is to take this time to make these human connections.
We were selling homes virtually, right? We would be on FaceTime, maybe not ever even meeting the client in person, even after closing escrow, just because there was so much interest in a property and we were trying to help buyers navigate multiple offers. Having the ability to now connect with them when they come in town, because each week brings a new crop of people, it’s such a transitional market.
I think our market on average has over a quarter-million people that influx into the town every week. So we see new faces — we’re seeing [people from] new areas traveling here, whether it’s Dallas, Texas, decided to come to town or Nashville, Tennessee, decided to come to town or Atlanta, Georgia … We’re able to kind of see these trends and it allows us to not only prospect but to take our clients to lunch or just see them in this environment and share this incredible second-home lifestyle with them.
And it’s really getting back to those basics of relationship-building that we’re focusing on at Spears Group.
As we approach Luxury Connect is there anything, in particular, you’re looking forward to?
Absolutely. I think last year was my first time at Luxury Connect and it really blew my mind seeing the level of agents that come together from all across the country and all across the world. I met folks from Brazil, from Canada, from Europe, and I really enjoyed those connections.
What I realized about that event is I wanted to be a lot more intentional about my collaboration efforts going into the next one. And for all of the Inman readers, one of our core values at Spears Group is collaboration, and I think that can become lost in translation in the excitement of a big event like Inman Connect.
Be intentional about the collaboration efforts, because you’ve got these wonderful people all coming together and the parallels that you may have with another broker or agent, you can try to catch on the front end. So right now, I’m working on going ahead and setting all my lunches, my dinners, my morning meetings and just being very intentional about the connections I’m able to make while I’m there. And in the spirit of a culture of collaboration, I’m just looking forward to making those new connections and making those new relationships.
The way that I’m connecting with folks ahead of Inman is through social media. For me, @jonathanmspears has been kind of my hub to reach out to folks on Instagram, and I’ve already set three or four meetings through Instagram for Inman Connect with people I’ve never talked to before. So that’s been a great way for me to get to know them a little bit ahead of the event and try to find those parallels with somebody.