South West Florida Where Should you Invest ?

Lee County


Overview
Lee County is situated in Southwest Florida, right on the Gulf of Mexico. Lee County’s four main cities are Ft. Myers, North Fort Myers, Fort Myers Beach, and Cape Coral. Ft. Myers is the oldest of the four, with historic homes dating from the early 1900’s. It is situated on the Caloosahatchee River which allows access to the Gulf of Mexico. Right across the river is North Fort Myers. Fort Myers Beach is located on a barrier island, southwest of Fort Myers. Lastly, Cape Coral is the areas largest city nestled between the Caloosahatchee River to the east and the Gulf of Mexico to the south and west. Lehigh Acres is our newest city and located inland toward the interior of the state and with no water access. Bonita Springs is the furthest south in Lee County and is just north of Naples. Naples is in a Collier County and will be discussed briefly.


Population
Lee County’s population is approximately 600,000. Once the area was primarily retirees but the median age has continued to drop over the years as more and more families have relocated here.


Accessibility
Interstate 75 provides easy access to all of Southwest Florida. We are approximately 3 hours from Disney and Miami and 2 hours from Tampa. Fort Myers International Airport is growing and brings in many visitors.


Why Lee County?
This areas greatest appeal is its natural beauty and abundant opportunities for enjoying the water and wildlife. Boaters, fishermen and beach goers all have extensive opportunities to enjoy the bounty. The world renowned beaches of Sanibel and Captiva are located on barrier islands just off the shores of Lee County. Many families find the beaches appealing here due to the calm rippling waves and the shallower waters close to shore. It’s all this along with the tropical climate that draws many “snowbirds” for the North to spend their winters here.








What is the current state of the housing market here and
how did it get that way?

Between 2002 and 2005 property values were rapidly escalating. Prices were rising in excess of 30% a year with some properties in 2005 going up as much as 50%! From late 2004 the greatest majority of new home purchases were not by end users but purely by investors with the intent to re-sell quickly at a premium.

A good example of this is Lehigh Acres where for many years building lots were selling for less than $1000 each. By 2005 they were selling for $60,000 with no ceiling in site. However, when you visited this area and looked around you would have been surprised at how much vacant land was still available. This was clear evidence that the market was clearly being speculatively driven.

Investment clubs were being invited to invest here and a number of them did so. The main home builders involved with this were Hanson Homes, First Homes, and Adams Homes. These were all entry level builders with homes in the1500 to 2000 sq ft. range. These homes were being built and sold to investors with the expectation to resell with a substantial profit upon completion.

In Nov 2005 it became evident that prices had reached a peak and started spiraling downwards. Builders continued to build as loans had been secured for the investor. When it came time to modify, values were considerably below what they had agreed to pay for the homes. These investors either needed to bring money to the table or allow them to go into foreclosure.

What is the market like today?

Currently, in today’s market, values have dropped by as much as 70% on these homes in these areas. They have dropped so much that they now sell for below what it costs to build them which has forced builders out of business and also resulted in an increase in the unemployment rate here.

The silver lining in all this is that for those who currently have the funds to invest, now is the time to do so! Many investors recognize that the current state of Lee County’s housing market represents a marvelous long term investment strategy. This is readily evident in the fact that some of these homes now get multiple offers for cash and often sell at the asking price or slightly above. Depending on the home and location sometimes they sell for well above the asking price.

Market conditions aside, this area has a large appeal for both national and international buyers. Interstate 75 makes it very easy to drive here from Ohio, Indiana and Michigan, thus many people from these states own second homes here or relocate here entirely. I also often see buyers from New York, New Jersey, Pennsylvania, Massachusetts and Wisconsin.

Internationally, Germans enjoy a large local presence. A non-stop flight from Düsseldorf, Germany is offered weekly to Fort Myers International Airport.
The British and other Europeans also find it easy to fly into Orlando, Tampa or Miami and make a connecting flight to Fort Myers or rent a vehicle in one of those cities and drive the rest of the way. For these international buyers, the weakened dollar has offered good value for money against the Euro and the British Pound. Many can buy a home here for less than they would buy a car at home.

Now let’s examine the specific numbers in Cape Coral, Fort Myers and Lehigh Acres. As of Jan 10th 2009 there are a combined total of 9,702 single family residences for sale. 1,523 of these are foreclosures, 4,039 are short sales and the rest are standard listings.

Homes with pending sales as of the 10th of Dec 2008 total 1,044 for Cape Coral, Fort Myers and Lehigh Acres. Of the 1,044 sales pending, 620 are foreclosures, 296 are short sales and the rest are standard listings. Please keep in mind with the holiday season some slow down is expected.

Below is a further break down of these figures by city:

Cape Coral

Total Listings: 3,924

Foreclosures: 522

Short Sales: 1,945

Sales pending as of Dec 10th 2008:

Total: 821

Foreclosures: 495

Short Sales: 229


Fort Myers

Total Listings: 3,176

Foreclosures: 338

Short Sales: 742

Sales pending as of Dec 10th 2008:

Total: 282

Foreclosures: 149

Short Sales: 66

Lehigh Acres

Total Listings: 2,603

Foreclosures: 663

Short Sales: 1,353

Sales pending as of Dec 10th 2008:

Total: 293

Foreclosures: 214

Short Sales: 59

A comparison of the figures above shows the most active market currently for sales pending is the Cape Coral market. Cape Coral has seen the greatest increase in pending sales, running at almost 100% over the same time last year. I believe this area still offers the greatest value for money at this time.

Another interesting fact is that of the 9,702 homes currently for sale 5,260 of those homes were built after 2000. So, over 50% of the homes for sale are less than 10 years old. Additionally 3,665 homes were built after 2005. That means 30% of the homes are only 4 years old or less!

These figures are consistent with what was said earlier concerning the majority of investor homes being built at that time. The majority of these newer and often never lived in homes are located in Cape Coral and Lehigh Acres.

Bonita and Naples did not see the speculative investor book as these other area did in the single family homes and not so many are currently for sale or no the market.

Bonita currently has 250 homes active of which 43 are foreclosures and 39 are short sales.Naples has 223 active listings of which 35 are foreclosures and 4 are short sales.

However the information concerning these 2 areas may not be accurate as the others as they have just formed their own MLS and not all listings in those areas can now be found in our MLS system.

Based on visits to these 2 areas to look at properties with customers the information above is deemed a good representation of what the current market is like in those area. Values have always been higher and the entry level builders where not building in those 2 areas to the extent they where in the other 3 cities.

If we look at condominiums in these area which I feel is where the greatest speculation took place we may find it to be very different.

None of the above information concerns condominiums as I feel there is still too much risk in these at present and would suggest avoiding these for the next 12 months.If you need an additional explanation as to why I can provide that as needed.

Cape Coral offers the best value as we currently have homes from 50,000 to over 5,000,000.With being surrounded by water this City has a wide appeal to all people.

Fort Myers offers similar appeal as Cape Coral does but does consist of more gated communities and has homes from 30,000 to over 10,000.000. Lehigh Acres has values from 30,000 to up to 350,000.Lehigh appeals to a wide range of ethnic groups and also first home buyers it does not have any water access to the Gulf so home values are not as high.

Contact Adrian at 239-281-5612 or adrianpwaring@hotmail.com for all of your real estate needs.