Market Trends real estate event shows Southwest Florida market slowdown - (2024)

Location no longer matters in Southwest Florida, residential real estate has cooled, but the fire’s still burning. And Hurricane Ian reinvigorated coastal markets despite destroying so many properties.

Those were three of the many takeaways generated Tuesday at the Market Trends of Southwest Florida real estate event, which drew more than 1,200 people to Caloosa Sound Convention Center in downtown Fort Myers.

“The future ain’t what it used to be,” was this year’s theme, and the phrase adorned the cover of an 88-page program packed full of data.

Market Trends real estate event shows Southwest Florida market slowdown - (1)

The data included Babco*ck Ranch as the fastest-growing new home community in the region, said Randy Thibaut, the first of three presenters and founder of LSI Companies, a regional real estate brokerage company. There were 1,407 new homes permitted there last year with Ave Maria ranking second with 806 and Westport in Charlotte County third with 515.

“Our market has changed since COVID,” Thibaut said. “It’s no longer about location, location, location. It’s about availability, price and higher ground. We see Babco*ck Ranch, which is the fastest-selling community in Southwest Florida, and the fifth-fastest growing in the entire United States. Which has changed the dynamics completely around.”

Residential permits rose by 3.8% from 2021 to 2022, from 25,183 to 26,147 permits, according to data pulled by LSI.

Multifamily permits rose by 62% in Lee County and 57% in Charlotte County and decreased by 18% in Collier County.

“We expect multifamily permits to level off,” Thibaut said.

Build-to-rent communities like Soltura will be on the rise. “When pricing hits a wall, and interest rates are high, build-for-rents are in,” he said.

Also, look for Charlotte County to trend upward in development data. “Charlotte County, here we come. Why?” he said. “Affordable land and availability.”

Thibaut, Denny Grimes of Denny Grimes & Team and Justin Thibaut, CEO of LSI Companies each incorporated into their presentations that rising interest rates have cooled real estate markets across the region, but regional real estate seems to be outpacing the rest of the country.

Grimes focused on the resale housing market. He started his presentation showing an early scene from “Top Gun: Maverick” when Tom Cruise’s character takes his jet to Mach 9, then inches it all the way to Mach 10 before going for even more speed. Ultimately, the jet fizzles out at Mach 10.4.

“Did we push it too hard?” Grimes said of 2021, which was the best real estate year on record for sales. “Did we take it too far with the market?”

Maybe, maybe not. But the market forces of rising interest rates, from 3.8% to 5.34%, to 5.97%, to 7.81% finally hampered the buying power of homebuyers, slowing home sales.

In Lee County from 2021 to 2022, single-family home sales dropped by 19.5%. Collier sales fell by 31% and Charlotte by 9.3%.

The median sales price rose to $416,250 in Lee, $775,000 in Collier and $389,450 in Charlotte.

“What happened?” Grimes said. “I’ll tell you what happened. It’s called the [Federal Reserve]. But we have to keep things in perspective.”

In 1982, when Grimes was in high school and had a mullet-style haircut – he showed the photograph on the screen – interest rates were 16%.

At some point, Grimes said, interest rates would fall again and prices accordingly would rise.

Grimes also expected high-rise condominium buildings to increase.

“High-rise living,” Grimes said. “When low-rising living is unavailable or unaffordable, high-rising living goes on the rise.”

Justin Thibaut concluded the presentation, giving a rundown of commercial real estate broken into hospitality, industrial, retail and office segments.

“The whales – cash buyers – in our market are back,” Thibaut said. “But they have a different target now. Coastal properties.”

Hurricane Ian wiped out about 75 coastal hotels and 3,400 rooms in Lee County alone.

“Today, less than 200 rooms are available,” Justin Thibaut said. “OK. We have a major problem on our hands. Let’s build it back.”

Building it back will prove costly for the developers, costs that later would be passed on to vacationers. The Margaritaville Resort, slated to be completed by the end of this year on Fort Myers Beach, eventually would be a “mid-range” property, not an elite one, he predicted.

“I’m not trying to be a downer here,” Thibaut said. “It’s just a reality.”

Industrial has overtaken office as a safer real estate bet, he said, as occupancy rates eclipsed 98% in the tri-county area, with rents hovering close to $11 per square foot in Lee and Charlotte counties and $14.87 per square foot in Collier.

By comparison, office occupancy hovers at close to 95% in Lee and Collier and 97.4% in Charlotte, with rents at $19.77 per square foot in Charlotte, $22.48 in Lee and $31.15 in Collier.

“Rents and occupancy are trending upwards in all three categories,” Justin Thibaut said.

“We’re seeing interest rates, we’re wondering what’s going to happen next. My thought is that it’s probably going to get a little worse before it gets a little better. But, at the same time, coming out of Hurricane Ian, we have been reinfused with cash buyers. So, we’re going to see a lot of really high transactions, high volume, big deals happening this year.”

Market Trends real estate event shows Southwest Florida market slowdown - (2024)

FAQs

Is the southwest Florida real estate market slowing down? ›

Findings from the latest report include: Residential unit sales were down across the board during the fourth quarter of 2023 for Southwest Florida, headlined by a 30 percent year-to-year decline in both multi-family and condominium sales Single-family home sales were also down 23 percent over the same period.

Is the Florida real estate market slowing down? ›

Price Growth in Check: Fueled by low inventory and high demand, home prices in Florida have enjoyed steady appreciation for years. However, with rising interest rates squeezing affordability, the pace of appreciation is expected to slow down considerably in 2024.

What is happening in the Florida real estate market? ›

Florida Housing Market Overview

In June 2024, home prices in Florida were up 2.3% compared to last year, selling for a median price. On average, the number of homes sold was down 14.1% year over year and there were 32,990 homes sold in June this year, down 38,387 homes sold in June last year.

What is the forecast for the Florida real estate market in 2024? ›

According to Zillow, home price appreciation is expected to slow down significantly in the coming years, with a predicted increase of only 3.4% for 2024. This could provide relief to buyers who have been priced out of the market in recent times.

What is the forecast for real estate in South Florida? ›

Home sales prices are projected to increase 6.9% in 2024 and 6.5% in 2025, with the median single-family sales price accelerating to 9.7% while the condominium/townhome median sales price rises a modest 2.5% as potential higher fees and assessments softens demand for this property type.

Is Florida in a real estate bubble? ›

But what's most concerning is that the run-up in South Florida home prices could be an indication of a housing bubble. This happens when home prices rise at a rapid pace, demand is up, and inventory is low. All of these are evident in South Florida's current housing market.

Will South Florida home prices go down? ›

Bottom line: We're not seeing any major home price decline or crash in the South Florida housing market just yet. The current supply of homes in South Florida still favors sellers. In the long run, it is hoped that higher interest rates will result in more days on the market (which gives buyers more choices).

Is now a good time to sell a house in Florida? ›

Best Time to Sell Your House for a Higher Price

April, May, and June are the best months to sell your house in Florida. The median sale price of houses in June 2023 was $409,600, which is expected to rise in 2024. However, cities like Doral and Palm Breach Gardens follow an upward trend throughout the year.

What is the market prediction for 2024? ›

As a whole, analysts are optimistic about the outlook for stock prices in 2024. The consensus analyst price target for the S&P 500 is 5,090, suggesting roughly 8.5% upside from current levels.

Which of America's biggest banks issued a warning on the housing market in Florida? ›

Citigroup's downgrade of homebuilders Lennar and D. R. Horton has spurred a warning from Raymond James, one of the biggest investment banking firms in the U.S., for Florida's sluggish real estate market.

How much is the average house in Florida? ›

$398,077. The average Florida home value is $398,077, up 2.5% over the past year and goes to pending in around 35 days.

Is the housing market cooling in Florida? ›

The big picture: Florida may be hotter than ever, but its housing market is cooling quicker than most other states, according to Redfin. Home construction, unaffordable home insurance and intense natural disaster threats contribute to increased supply and lower demand.

Are Naples, Florida home prices dropping? ›

What is the housing market like in Naples today? In June 2024, Naples home prices were down 2.1% compared to last year, selling for a median price of $715K. On average, homes in Naples sell after 79 days on the market compared to 49 days last year. There were 117 homes sold in June this year, down from 138 last year.

Is the housing market in Naples Florida in 2024? ›

Market Stability and Moderate Growth

Real estate experts anticipate continued stability in the Naples real estate market for 2024. While the rapid price increases witnessed during the peak pandemic period will moderate, a balanced market with consistent, moderate growth is expected.

Top Articles
Latest Posts
Article information

Author: Rev. Porsche Oberbrunner

Last Updated:

Views: 6145

Rating: 4.2 / 5 (73 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Rev. Porsche Oberbrunner

Birthday: 1994-06-25

Address: Suite 153 582 Lubowitz Walks, Port Alfredoborough, IN 72879-2838

Phone: +128413562823324

Job: IT Strategist

Hobby: Video gaming, Basketball, Web surfing, Book restoration, Jogging, Shooting, Fishing

Introduction: My name is Rev. Porsche Oberbrunner, I am a zany, graceful, talented, witty, determined, shiny, enchanting person who loves writing and wants to share my knowledge and understanding with you.