The latest Brookings Institute State of Metropolitan America Report has some very interesting data regarding the Cape Coral-Fort Myers Metropolitan Statistical Area (MSA). This area is categorized as a Mid-Sized Magnet with similar characteristics (high growth, low diversity, low education) as cities including: Baton Rouge, LA; Boise, ID; Greenville, SC; Jacksonville, FL; Little Rock, AR and Oklahoma City, OK.
Some of the key indicators about the Cape Coral – Lee County including our ranking out of the top 100 MSAs:
Total population: 593,136 US Rank: 86
% change in population 2000-2008: 33.6% US Rank: 4
% non-white population% 27.4% US Rank: 56
% of population that is foreign-born: 15.1% US Rank: 27
% of population age 45 and over 47.3% US Rank: 3
Percent seniors (65+) 22.9% US Rank: 2
Percent adults with bachelor’s degrees 26.1% US Rank: 74
% of households that are married couples with children: 16.2% US Rank: 97
Median household income: $51,081 US Rank: 60
The age demographics truly jumped out at me, with our region ranking second nationally for senior citizens and third for baby boomers. The baby boomer (45+) stats truly correlate with what we are seeing in the trenches. The overwhelming majority of our customers right now fall into the pre-retirement baby boomer demographic bucket. Many have lost confidence in the stock market and are looking to reallocate assets away from the stock market and into a piece of Fort Myers real estate. Key drivers for this demographic group include a move toward urbanism, a growing interest in amenity-rich gated communities and 55+ communities.
The minnpost.com has a story about a recent speech given by housing researcher John Mcllwain titled, “The Suburban Century is Over.” Mcllwain predicts a shift in American housing and lifestyle preference away from the white picket fence suburbia towards a more urban lifestyle.
In TV terms the wonderful suburban neighborhoods of Leave It To Beaver, The Brady Bunch and Bewitched are fading and the urban lifestyles of the Odd Couple, Mary Tyler Moore and Frazier are coming of age.
What does this mean for the Southwest Florida and the greater Fort Myers area? While no one is ever going to confuse Southwest Florida with the Upper West Side, we do have some really dynamic urban areas like 5th Avenue in Naples. In recent years, a handful of urban-oriented projects have been developed or renovated that address this shifting lifestyle demographic.
Developments in the Fort Myers area offering an urban lifestyle experience include:
High Point Place – Riverfront high-rise in downtown Fort Myers walk to restaurants, Publix, Starbucks, offices, parks, theatres and museums.
Residences at Coconut Point – Condos located on the upper-levels of the Coconut Point Mall which has emerged as the destination in South Lee County.
Rapallo – Gated condos and villas adjacent and very walkable to the dynamic Coconut Point Mall
Cape Harbour – Waterfront boating community with vibrant boardwalk featuring restaurants, retail and community events.
Patio De Leon – Downtown Fort Myers renovated historic condos located above commercial space.
Earnhardt Condominiums – Downtown Fort Myers renovated historic condos located above commercial space
When the market turns and development starts up again, it would sure be wonderful to see more project like these completed rather than starter homes on random 1/4 acre plated lots in the hinterlands.
One of the questions we hear nearly every day is, when will the economy improve and housing prices start to increase? This is one of those questions that is almost impossible to answer. I believe that the answer is tied to job growth, which continues to be an area of concern here in Southwest Florida.
University of Florida Economist David Denslow recently spoke on the topic of Florida’s Economic Recovery and the Sunshine State News reports on his speech. Denslow pegs recovery to demographics and the graying of America with a significant increase in baby-boomers looking to move to Florida. The report about Denslow’s speech is a must read for anyone considering an investment in Southwest Florida real estate.
Canadian buyers are very active in the real estate market here in Southwest Florida. At this time, approximately 7% of our website traffic originates in Canada and over 10% of our transaction in the last year have been with Canadian buyers.
Canadians are drawn to the Fort Myers area for our average annual temperatures of 72 F, our year round golfing and our Gulf coastline. The Southwest Florida market downturn has reduced home prices in many upscale communities to a level of unprecedented affordability. Buying a Fort Myers foreclosure property from a bank is an approach many Canadians are taking to get the absolute best deal.
If you are considering a real estate investment in Southwest Florida, it is important to understand all the costs involved with both the transaction itself as well carry costs after you own the property. A Montreal Gazette column titled, Is it time to bottom fish for real estate in the U.S.? discusses these issues and is a must read for any Canadian considering an investment in Southwest Florida.
The latest report on the Lee County rental market released by RealFacts of Novato, CA detailed some significant shifts in our rental market for 4Q09.
Lee County apartment occupancy rates in 4Q09 climbed 7.2% to 91.1%, the highest gain in the State of Florida. Lee County rents for the same period dropped 12.2% to an average of $776/month. This decline in rental rates was second in the State of Florida, trailing only the Ocala market.
It would appear that many of our residents who have lost their homes to foreclosure are now renting. With severely damaged credit associated with a foreclosure, many of these residents will be renting for quite some time. As these leases start to expire, I expect that we will see a significant uptick in demand for lease-to-own arrangements. These types of arrangements may prove very attractive for investors with skinny or negative cash flow assets.
WGCU hosted a panel of Southwest Florida real estate experts including Dick Hogan from the Fort Myer News-Press. The panel discussed the state of the market and expectations for 2010.
Distressed real estate and foreclosures dominated the discussion. The panel fielded calls from local homeowners facing foreclosure and having great difficulty trying to renegotiate with their lenders.
The panel discussion was recorded and is available for replay.
One of the buyer misconceptions about our current Fort Myers area real estate market is that banks will approve ultra-aggressive, low-ball offers on short sales and foreclosures. Approving low-ball offers in Lee County has absolutely not been the operating model for lending institutions during 2009. Particularly for foreclosures, much of the discount on these properties is reflected in the aggressive selling price.
The numbers speak for themselves regarding the ratio of selling price to listing price. In 2009, 20,480 residential properties were sold in Lee County for a total of $2.7B. The average listing price was $140,706 and the average selling price was $132,068. This represents an average selling price to listing price ratio of 94%. Anyone who tells you that banks are accepting offers at 50% of asking price is just not dealing with reality.
Throughout much of 2009, the News-Press has been chock full of local Realtors discussing how our Southwest Florida real estate market has reached the bottom……and is headed upward. While this would be great news and cause for celebration, I think it is truly difficult to really make a definitive bottom prediction until you have moved well past the bottom.
A Miami Herald article titled, Real-estate bottom is not when things appear to be better, rang true with me and all these bottom predictions. The article suggests that despite the uptick in sales and decreasing inventories that we have seen in 2009, we are truly not at the bottom. The article opines that government intervention is the cause for the apparent market improvement. Two examples cited include the first time buyers tax credits and court systems that are stalled due to being clogged with foreclosures.
While I don’t think I will truly know the bottom until it hits me over the head, we are continuing to see significant interest in well-priced Fort Myers foreclosures and Estero foreclosures from those looking for a pre-retirement second home. Tough to argue with a 70 degree day down here when the Northeast is getting slammed with a foot of snow!
The Realtor Association of Fort Myers and the Beach released November 2009 home sales numbers which highlight significantly increased levels of activity in our market. These figures reinforce the sentiment of our team which has been extremely busy with second home buyers looking to take advantage of our reduced home prices.
Highlights from the November 2009 figures released by the Realtor board include:
An increase in homes sales over November 2008 of 70.5%
2009 YTD single-family home sales of 15,336 – up from 8,768 for all of 2008
November sales included 47.4% bank owned, 18.9% short sales and 33.7% conventional
MLS inventory of 6,976 homes down from 12,106 in November 2008
It is a great time to be a buyer in Southwest Florida, there are interesting opportunities across all housing types and price ranges. Use our map tool to start your search of every active listing in the Greater Fort Myers area.
The November 2009 Credit Suisse Monthly Survey of Realtors confirms what we are currently seeing in the Fort Myers market.
Pre-retirement baby-boomers are taking a serious look for a second home in Southwest Florida. Our highly discounted prices are very enticing and the continued strength of the stock market this year are two of the key drivers for this class of buyer. Most of the buyers in this category are paying cash. This opens the market up to deeply discounted condo projects that are currently not finance-able with conventional mortgages.
Here is an excerpt from the Credit Suisse report:
Here is a resource to view Fort Myers real estate including all the currently available active listings. There are interesting bargains to be had across all housing types and pricing levels.
With the Loonie at parity with the US Dollar and across the board price reductions, many Canadians are now considering an investment in Southwest Florida real estate. The Canadian Press reports that the currency equality is very enticing but shouldn’t be the key driver in your decision to buy real estate in Florida. Some of the drivers that should be considered include lifestyle goals and investment expectations.
An investment by a Canadian in Florida real estate is certainly a decision that should not be rushed into. It can be most helpful to visit or rent in a community prior to making the decision to buy. Our team is hearing from many Canadians who have previously taken this approach and are now considering a purchase primarily due to the significant price reductions on much of the real estate inventory in Southwest Florida. Popular areas for Canadian buyers include Fort Myers, Fort Myers Beach and Estero.
The Naples News reports that single-family home re-sales in the Fort Myers area are up 120% for the first nine months of 2009 vs. the same period last year. In the January thru September period this year, 12,526 single-family homes were sold, up from 5,727 in the same period of 2008.
This dramatic increase in sales activity is putting a big dent in our inventory of available homes. Currently there are 6,809 single-family homes available in the MLS system, down from over 12, 000 in September of 2008.
Bank-owned properties are currently about half of the monthly sales, here is a resource to view available Fort Myers foreclosure listings.
Over the past few years, I have been rather critical of the Save Our Homes Amendment as I have historically believed that it placed an unfair burden on the lifeline of Southwest Florida……..second home owners.
It has always seemed very unfair to me that second homeowners, who were down here on a seasonal basis and not using resources like our schools, were being penalized because they didn’t qualify for a homestead exemption. These second homeowners have had very little power to change this inequity as they are not residents, don’t vote and are not represented in Tallahassee.
With the drastic reduction in home values throughout our region, the Homestead Act is now penalizing homesteaders as their valuation reductions are capped at a maximum of 3%. It will be interesting to see if these penalized homesteaders can generate enough of a voice to repeal this unfair act and and bring normalcy to Florida real estate valuations.
Lee County home sales soared to 1,705 in June 2009, up from 1,417 in May 2009. Additionally, sales are up 137% from the 719 homes sold in June 2008. The median price of these June sales was $87,900, a slight drop from the May median of $88,500.
Distressed properties that were either foreclosures or short sales represented 76% of the June 2009 sales in Lee County. It will be interesting to see how the local rental market holds up as a majority of these sales were to cash buyers that will be renting them out.
Cape Coral foreclosure and Fort Myers foreclosure inventories continue to offer buying opportunities as court system works through the existing backlog of over 20,000 foreclosures.
For those of you considering dipping your toe in the Florida real estate market, Jim Cramer believes that we are at the bottom. The supporting logic behind this proclamation is that builders stopped new construction in Florida two years ago and inventory is being absorbed by our continued low interest rates. Cramer suggests that Florida will lead the nation out of the housing crisis.
I was just reading a hot debate on Trulia about home price escalation in Cape Coral during 2009. Several individuals tossed out estimates about their view on the percentage that prices have gone up this year in Cape Coral.
The fact of the matter is that median home prices in Cape Coral have not materially changed at all in 2009 with the median price in January within a 1/2 percent of the MTD median price for June.
According to figures recently released by Realty Trac, the Cape Coral – Fort Myers area experienced a drop in the number of foreclosure filings in May 2009. There were 1,803 filings in the region in May 2009, down from 1,902 filings in April 2009.
With this drop the Lee County area fell from first to sixth nationally in foreclosure as a percentage of total homes. For May, one is 82 Lee County housing units received a foreclosure filing.
If you are in the market for a Cape Coral foreclosure, here are some resources to locate one:
According to Preliminary reports by the Lee County Property Appraiser, property values in Lee County have on average dropped by 25% over the last year. The key driver is that over 80% of our arms length transactions have been distressed sales.
WGCU hosted a panel of Southwest Florida real estate experts including Dick Hogan from the Fort Myer News-Press. The panel discussed the state of the market and expectations for 2010.
One of the buyer misconceptions about our current Fort Myers area real estate market is that banks will approve ultra-aggressive, low-ball offers on short sales and foreclosures. Approving low-ball offers in Lee County has absolutely not been the operating model for lending institutions during 2009. Particularly for foreclosures, much of the discount on these properties is reflected in the aggressive selling price.
Here is a resource to view 
