Our selling season is officially over in Southwest Florida. The beaches are quieter, locals are able to get a tee time, I can finally get a restaurant reservation again, and builders are tallying their sales. Most builders we’ve spoken with recently report moderate to strong sales with increasing interest from Northeast buyers seeking tax shelter. Fort Myers has regained strength by diversifying product offerings, and we will likely upgrade the market to Normal next month.
Other takeaways from our field research include:
- It’s not just the active adult communities that are performing well. It’s no secret that Southwest Florida is a retiree haven, but we have observed increased demand from family buyers. Community amenity programs that offer something for everyone are performing the strongest. A tot lot might be on one side of the community pool, while a bocce court is on the other, and all residents enjoy the extensive walking trails. Several new neighborhoods have opened with families in mind that offer low HOA fees, private yards, and good schools.
- Interest rates may be positively influencing sales. Local families and retirees alike are selling their homes and buying new before rates increase. Sales agents note increased interest from locals, and many communities priced in the $200s to $400s report double-digit monthly sales.
- Lennar’s acquisition of WCI and CalAtlantic is putting pressure on new home prices. Lennar’s Everything’s Included program and introduction of lower-priced product in acquired communities is attracting buyers. New home price appreciation has declined the past two years in Fort Myers and Naples as builders struggle to meet the affordability challenges by offering smaller product, larger incentives, or both.
- Residents are staying. The traditional snowbird lifestyle is becoming less popular, as the quality of life and tax benefits of Florida residency are extremely beneficial, particularly with buyers from the Northeast, California, and Illinois. Population growth in Fort Myers and Naples remains strong at 2.7% and 2.0%, respectively, during the last 12 months. Fort Myers added an additional 19,800 residents, and Naples increased 7,300 residents in the last year.
- The new retiree is younger and may still be working. We see increasing preferences for single-family homes as buyers plan to live in Florida full-time and require extra square footage as well as a garage and dedicated office space. Single-family permits have increased in both markets, including a whopping 20% year over year in Fort Myers.
Looking ahead, we expect continued strength in all Florida housing markets due to demographic trends and a favorable tax policy. We are watching the slow employment growth in Fort Myers and Naples, although employment numbers do not capture the large amount of self-employed residents who choose to live in Southwest Florida. For local insight and strategy on other Florida markets, contact Amanda or any of our Florida team members.
We will also be present at the 2018 ULI Forida Summit on June 7–8. Please reach out if you’d like to schedule an in-person meeting to discuss these trends in Southwest Florida or in other Florida markets.