January 21, 2013 in Uncategorized
During November 2012 the Lee Building Industry Association held their second annual Market Trends symposium. One of the key speakers, Randy Thibaut of Land Solutions, stated “The stars are aligning for pent-up demand to rejuvenate Southwest Florida’s home-building market”. This was an observation many local builders and businesses wanted to hear. Randy went on to point out that we are on track to have an expected 4,000 single-family-home permits issued by the end of this year in Lee, Collier and Charlotte counties. After nearly 5 years of new construction being in the doldrums as the real estate boom turned to a bust, the continued rise in new permits being issued for new construction suggests the industry is now in recovery mode. Randy went on to observe that a steady recovery to a sustainable level of about 10,000 houses a year is possible as various factors kick into gear to stimulate demand.
When studying the price of new construction versus an existing home, it is now apparent that the price of building a new home is a compelling option and competitive with existing home prices. This is the first time this has happened since the 2006 decline of real estate prices which left an oversupply of new construction homes at boom prices. Buyers entering the market are taking note of this change and driving the double-digit increase were are seeing in key residential areas for single family home permits. This is being further stimulated by the ever declining inventory of homes for sale which means less buyer choice. If building new is comparable to an existing home, why not build and have exactly what you want?
Another fundamental change in the market is the decline in large tracts of land available to purchase at fire sale prices. Randy Thibaut specializes in brokering large property sales. He announced to the attendees “The major builders basically have bought up all the distressed properties at distressed property prices. They’ve got that in their hip pockets. The new builders are going to have to pay retail.” He further strengthened his observations by adding in the numbers. He spoke of a wave of major land purchases recently by builders including $3 million for the 240-acre Paradise Preserve project in North Fort Myers (the old Lochmoor Country Club) by Bradenburg Properties of Florida in March 2012.
In closing his talk to the group, Randy said he felt it was optimistic to look for 5,000 issued single family permits for 2013, up for the 4,000 for 2012. The general feeling of the local building industry is if we can keep gradually and steadily improving, a market where we issue 10,000 single family permits a year is felt to be a good stable number in a balanced real estate market.
Keely Smith is a Florida Licensed Real Estate Broker primarily serving the Southwest Florida coast. Keely specializes in the Cape Coral fl Real Estate market and also in the Fort Myers Fl Real Estate market. Her expertise is in helping out of state and overseas clients wishing to purchase a second home either for personal usage or as investment vacation property with income potential.
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