Meeting Service Delivery and Lifestyle Expectations
The market is white hot in the southeast United States – it has exploded. Other markets are seeing this type of change but the current shift in the southeast appears more meaningful than the boom-bust cycles we've seen historically. A swelling of the Florida market started at the beginning of tax reform. This movement is different than the normalized transition, which included empty nesters, retirees, and people buying second homes or investment properties. The move that followed the tax reform included people realizing they could save enough money moving to Florida to make it beneficial for wealth preservation.
What migration trends are we seeing?
And with that movement, developers throughout the state of Florida shifted their products and strategies to make sure that they aligned with the discerning needs and expectations of these buyers. One big change was people making the southeast their primary residence, as opposed to the second. A primary residence is least likely to be sold. Additionally, buyers were looking for slightly different properties. Especially combined with the COVID-19 pandemic, those migrating from the northeast in particular wanted a more controlled environment – no shared walls, a pool, and a walkable neighborhood. Initially the condominium sector paused because of uncertainty over how the virus transmitted. Very quickly, prices for single-family homes went through the roof. Eventually, the influx of buyers trickled back to condo buildings.
But then something else happened. In addition to buyers coming in droves from the northeast, Californians started making a push into our market. People realized that the southeast offers real estate assets that resonated with their needs in terms of quality and sophistication, density, size, space and monetization. It wasn't just the lifestyle; it wasn't just the taxes. It was the culmination of all aspects of our society, from culture to restaurants to hospitals to education. The southeast has raised the bar in all of those areas and will see significant long-term transformational benefits as a result. It’s a stronger market. Home values continue to surge and will continue to do so for the coming years.
People increasingly made the southeast, including Florida and Georgia, their primary residence, which created a large shift in the way that communities were supporting their homeowners. More people were spending more time in their homes and condos. This resulted in more residents interested in utilizing the amenities. From a resale perspective, homes with pools and access to comprehensive amenities quickly rose in value.
What has this change meant from an operational perspective?
Many people started taking a step back and asking, Where do I want to live? What type of lifestyle do I want? And that's made amenities and how a professionally managed community is run all that much more important for consumers today.
Boards are discussing this issue from a perspective of long-term enhancement of property values within our communities. What amenities will be best utilized by and attract residents, from tennis courts to pools and beyond? All of those things are now becoming part of the long-term strategic planning for boards, and certainly on the top of mind for homeowners and investors alike.
Is this growth sustainable?Primarily, Florida was known as a condominium-based state. The investment cycle of booms and busts was largely centered around condos. Today, it's different. Developers are requiring anywhere between 40 and 50% deposits on what are in many cases multimillion dollar products. The people buying in the region now are not looking to flip contracts. They're looking to buy and use their homes.
The raw numbers indicate that the new growth is not just pandemic driven. This is creating a snowball effect. Anyone who can be in Florida wants to be in Florida. As there's simply not enough space for everybody, product is going to continue to increase in value. Inventory will come up, but it's only going to come up because pricing is going to drive the market.
This is here to stay – high occupancy levels coupled with high demand for highly amenitized communities. Price points will continue to remain high and the demand to be in communities that are well structured and well managed is going to be our future for the long run.
What does that mean for long-term utility infrastructure? Do our communities have enough fiber to support high volumes of occupancy to secure access to cable and internet? What does the technology infrastructure look like when visiting the clubhouses? Can condominium buildings provide ease of access, parking and concierge service? The ease of use of these programs is going to be a predominant discussion for each of our communities, and that's a direct result of the high volume of occupancy across the market.
How are technology needs changing in communities?Within the pandemic, people were stuck in their apartments or in their homes. It required a strong amount of Wi-Fi to ensure coverage from beach to pool to lobby and in between. Technology is key to many amenities, from being able to press a button to get package requests, working with ports for the needs of residents, booking spa rooms or tennis courts, and helping front-of-house staff address residents by name and understand their needs. Many communities have upgraded their packages and their infrastructure, both in hardware and in service delivery.
The long-term investment planning of the community will dictate how homeowners are going to enter the facilities, property, or grounds. There's certainly a demand for touchless access. Gone are the days of using ID to enter the property. It's going to take some time for communities to adapt to newer technology, but even more important is having an integrated system so that the homeowner has an easy point of access and the ability to float through the property.
It's an important topic and conversation, and one that warrants long-term planning. This isn't an overnight decision. Boards want to have a structure thought through – what program works best for the needs of the community and how to best handle investment into that? Communities that are focused and united on making additional investments are going to continue to remain cutting edge against the competition and retain property values. Technology is an important area of focus.
Obviously, cost is a factor, but technology allows costs to be mitigated to some extent. It can bring into play other elements that may not have been considered in the past, like having lights and commonalities automatically shut off when rooms are not being used.
Technology also highly impacts the everyday experience of residents. Imagine when you come to your elevator and it uses a retinal scan to recognize that you're going to unit 2208 and the door opens. The button is already pushed. You get off. Your door into your unit opens up automatically because it also has recognition software. That’s a pretty impressive experience for somebody. We're moving into a Jetsons type of environment.
From a staffing perspective, how can properties enhance service delivery?A lot of people desire a higher level of service, and that's where it becomes paramount that teams are fully trained with a hospitality mindset.
Leveraging technology where possible comes into play so that it's not entirely person-to-person interactions. For those who prefer to do something quickly, late at night or on the weekends, the entire customer experience is being questioned. And the reality is that many want a higher level of service. That's why they choose to live in an association. So having a capable and trained staff that have a hospitality mindset is critical.
Boards and communities continue to invest in this area. They want staff to offer a clubhouse level of service, including poolside food and beverage programs. From a technology perspective, the sky is the limit. Taking a look at how we interface with our communities from a technology perspective is absolutely top of mind. And doing so with a hospitality flair is critical.
How are communities providing these vastly increased Wi-Fi demands without breaking the bank?Internet access is a property-by-property discussion, and depends on the needs of the community.
How are amenity expectations in the southeast US evolving?A shift we're seeing is that residents are working remotely – and therefore at home – considerably more than before. This is putting a much higher demand on existing staffing levels and usage of building amenities. Before, beautiful amenities quite often lay dormant, with limited usage. People want to see spaces activated at home; they want a sense of community and to feel the value of living at their property.
Residents are looking for fitness and wellness programing. That translates into group fitness classes, private fitness, one-to-one instruction, and event programing. Gone are the days where the concierge is only onsite 9 to 5. Now the technological platform is in place for residents to make a request to a virtual concierge 24/7. The real differentiator for upscale living is to make a property stand out from the crowd by putting on these services, because this is an expectation with many new clients and residents moving into the region, particularly from the northeast and the west coast.
What can residential hospitality do to train and develop the onsite property staff to offer these elevated levels of hospitality and service?FirstService Residential is redefining the condominium world by enacting luxury, five-star hospitality concepts into our condos, understanding the value of truly cultivating interpersonal relationships to unite teams for the common goal of delivering exceptional service. This goal transcends budget levels. Within our teams, we assume that understanding hospitality is with truly genuine interaction. Technology is key, yet hand-in-hand with the experience of technology goes the staff and the associates that we have on-site. FirstService prides itself on an amazing culture and a set of global service standards, the blueprint to success in residential hospitality. From management all the way to the back of house, our valet teams, our security teams, any third-party vendors, we are all one team, we are all here to serve our residents.
This idea comes with the understanding that every property is different. Our residents are different. The cultures on those properties are different. Once we have a complete understanding of the property, we cater to their personalized hospitality needs and service requirments. The philosophy of hospitality stays the same.
How can preference sheets boost service delivery?Our teams focus on service delivery by seeing it through the eyes of the resident. We understand our residents live here and want to feel at home with a high level of service. The goal is to go a step above, to get to know our residents’ preferences and to understand what the culture of their building is.
It takes a cohesive team to deliver all of this to every single community. As things continue to shift, FirstService Residential will continue to do everything we can and continue to stay proactive and ahead of these trends. You can count on us for that.