First days and now six months after the forces of Mother Nature destroyed much of Fort Myers Beach, the forces of human nature began and continue churning to reshape it.
A 1954, three-bedroom, two-bath, landlocked home on Bayview Avenue that sold for $545,000 in April 2021 sold again in January for $500,000. At first glance, that’s an 8% depreciation in value. But upon further review, Hurricane Ian destroyed that house, leaving only splintered wood in its wake.
Raw land on the beach is selling after the storm at prices close to what undamaged homes were selling for before it. A $500,000 lot, plus about $500,000 to build a 2,000-square-foot home at $250 per square foot, means million-dollar homes are going to become the norm on the island. In 2022, only during March, May and December did the average price of a Fort Myers Beach home eclipse the $1 million mark.
Money and change are coming to this 7-mile-long island, real estate experts are saying, and that change was already in the works before the storm formed.
What had been a town of about 5,600 residents will require a new real estate financial stratosphere for the future, whether people like it or not. The financial realities of adhering to modern, hurricane-resistant building codes do not match the past. They do not match the desires of those who grew up eating ice cream cones from the vanished Dairy Queen at Times Square or those who enjoyed rum runners and date nights at the wood-frame Cottage bar and restaurant, a beachfront site that listed for sale at $16 million.
Hurricane Ian, a Category 4 storm that struck Sept. 28, 2022, inflicted the worst-case scenario on the town’s citizens, who lost their iconic fishing pier and many landmark restaurants and shops to the 155-mile-an-hour-plus winds and more than 12 feet of storm surge. Of the 159 confirmed deaths from the storm, 14 died on the island.
The storm also accelerated an ongoing scenario for real estate developers and investors. What mostly had been a Spring Break destination with cheap T-shirt and flip-flop shops suddenly shifted to a “blank canvas” on which to rebuild the island into a luxury tourist destination.
Times Square, the town’s most iconic area, and one with seven different property owners near the northern end of the island at the base of Matanzas Pass Bridge, still lies in ruins and uncertainty over what will become of it next.
The adjacent 254-room Margaritaville Resort construction project’s concrete-block walls survived the storm just fine. All the interior work had to be gutted and redone, setting the project back by at least three months. But it could be finished as soon as the first anniversary of Ian, and it will be the first of what are expected to be many grandiose projects to open.
“Margaritaville is going to be nice,” says Randy Thibaut, founder of LSI Companies, a land brokerage firm. “But it’s not going to be the lion.”
Hundreds of wood frame and older beachfront structures up and down the island didn’t stand a chance against the storm surge. They were splintered apart, some of them washing away into Estero Bay and the Gulf of Mexico.
Icons are gone
Some of that old-school charm washed away with it, said Joe Orlandini, a Fort Myers Beach builder and developer and owner of Orlandini Development. He spent the first weeks after the storm helping neighboring business owners recover signage and belongings that had floated elsewhere.
“I think we’ll see things built back much differently because of the way the older buildings were built,” Orlandini says. “The difficult part is, I really enjoyed that cottage-y, old-beach charm. The Shamrock and the Cottage and the Junkanoo and Times Square. It’s not going to be the same. It’s unfortunate. I’m going to miss it. It’s going to be hard to see it go. But we’ll have to deal with transitioning into building buildings that can withstand a situation like this again. We’re not going to be able to have the old cottages we had; ground-level bars that were small and quaint.”
Anita Cereceda, elected the town’s first mayor in 1995 and a second-generation business owner on the island, lost three businesses to the storm but remains determined to reopen her shop at Santini Plaza on the southern end of the island. The fate of her other two stores remains uncertain.
“The Pier Peddler, my folks opened in 1985,” she says. “On December 31, we would have celebrated 38 years in business. Local Color, I opened in 2003. Both of those stores were just wiped away. They literally crumbled to nothing. There is nothing to salvage. The rebuilding of Times Square will probably be virtually impossible.”
Cereceda’s mid-island home was made from two 1926 fishing shacks. It will be restored, she said, because the estimates fell south of the 50% rule. According to FEMA guidelines, if the repair costs of a property exceed 50% of the market value prior to sustaining the damage, the property must be brought up to current floodplain management standards.
“They were brought in by a barge,” she says of her home’s walls. “They were planted on my property. The house, structurally, is sound. It’s all wood. But right now, it’s completely gutted.”
While Cereceda knows she can rebuild, so many others remain in limbo, she said.
“It’s very fluid,” she says. “It’s fluid for a number of reasons. The residents, if they’re in a condo, they’re likely waiting for electrical and elevator repairs. That seems to be a common denominator. I’m hearing they could be delayed for up to a year from now.
“Then there are the single-family homeowners. They’re having the unfortunate experience of not getting results from the insurance companies. They get $200,000 from their insurance company, but it costs $350,000 to rebuild their home.”
Some are finding a solution to that problem, she said, by taking the insurance payoff and selling their property, then moving somewhere else.
“And then they can live happily ever after,” Cereceda says. “But it’s very sad to see them go. When people can’t afford to replace their home, what happens is it gets demolished. Something completely different gets rebuilt. And it changes the character of the town. It was going to change anyway.”
The Margaritaville ripple effect
About five years before Hurricane Ian struck, Tom Torgerson, the CEO of TPI Hospitality, began looking to install a Margaritaville Resort on what had been a decaying strip shopping center.
TPI assembled seven acres, some of it beachfront, and in August 2021 partnered with Stonehill Strategic Capital on a $104 million construction loan. Although Margaritaville has yet to announce room rates, the expense surely means the end of $300 room nights on Fort Myers Beach.
“It took Tom Torgerson five years to get what he wanted,” says Terry Schad of the John R. Woods Property Group’s Gulf Coast team. Schad has been brokering Fort Myers Beach properties for more than 40 years now. He thought he had seen it all, until Ian hit. “Tom is just great for the community. He’s going to be the first out of the ground. That’s going to help us all.”
Even before the hurricane, the news of a new Margaritaville-branded resort brought wealthier eyeballs to Fort Myers Beach as property investors, said Dennis Wagaman of Current Coastal Realty. He called it the ripple effect.
“We were already on a trajectory of redevelopment and appreciation,” Wagaman says. “Margaritaville brought our flip-flop and T-shirt place a new level of awareness. I was getting folks from across the country that we’ve never heard from before. I’ve been getting calls from all sorts of investors. That has elevated us to a new level of awareness.”
Fort Myers Beach won’t be the next Naples, Schad said, but it won’t be like it used to be either. He recalled selling a house in 1988 for $65,000, then helping the buyer flip it two years later for $90,000, which was $5,000 above the asking price. The thrilled seller from back then might be pained to learn the same property now would sell for $750,000.
“The top 10% of money earners will be looking at Fort Myers Beach,” Schad says, “instead of Naples, where you’re dealing with the top 1% of money earners. People are [believing] that Fort Myers Beach is going to be one of the nicest beaches in all of Florida. Because of newness. It’s depressing right now. But someday, it’s going to be gorgeous.”
That said, the current state of the market is a bit chaotic.
“Right now, just to buy a home, you’re talking $450,000 for a small lot,” Schad says. “Water lots, you can’t find one for $600,000. Now, I’m going to say $700,000. I’m still getting the calls. People are trying to scam people. People who are buying right now, they are investors. And they are paying the high dollar. They’re buying to fix up the homes and sell them. Just to redo a home right now, it’s going to take a year. And it’s going to take three years to build one.”
Alex King, a Realtor with Current Coast Realty, sold a condominium on the north end of the island for $686,000 in 2021. He had the same condo under contract this February for $880,000.
“I listed it for $100,000 more than the highest price paid last year during high season,” King says. “Four other [real estate agents] are begging me to find another one. You can’t occupy it until September, and it still has drywall that hasn’t been fixed yet.
“People have to remember the demand was there before. We’ve already been discovered. During COVID, it was on steroids.”
Some residents promise to stay
Not everyone is selling. Jay Highley’s house won’t change much. It’s elevated by more than 10 feet from ground level and not far from the beach, fronting a canal with Estero Bay access. He paid just under $400,000 for it in May 2012. All the front siding will need to be redone, but the house otherwise survived the storm just fine, he said.
The damaged house next door provides another glimpse of how real estate prices are surging since Hurricane Ian hit. Highley bought it for $750,000 in January and plans on turning it into a rental property. His next-door neighbor didn’t want to stay there and endure the growing pains that are sure to come with the ongoing rebirth of the beach. The house, like Highley’s, needs exterior repairs and has canal access.
“We’re committed to the beach,” Highley says. “We will refresh the look. But there won’t be a McMansion here.”
Nick Nigh lives off Madison Court, near the middle of the island. There won’t be a “McMansion” there, either. The part-time resident from near Toledo, Ohio, intends to stay. “We had very little damage,” Nigh says. “We consider ourselves so lucky.”
In this case, “lucky” means needing to replace some ridge vents on the roof, some shingles, some siding and the electrical panels and meter. Nigh’s home was without electricity from Sept. 28 until mid-December. From then, and continuing into February, the phone rang with calls from would-be buyers of his home, which is near the beach but not on a canal. He paid $585,000 for it in 2018. He could have gotten more than that now.
“I’ve had so many calls,” Nigh says. “Probably a hundred calls from people wanting to buy it. One of them asked me, ‘Can I ask you why you don’t want to sell?’ Because I don’t want to. Even if I took $2 million for it, where else could I get something like this for that kind of money?”
Four houses down, Nigh’s neighbor Alison Hourigan also plans to stay. She and her husband Mark paid a mere $80,000 for the house in 1988. They remodeled and put it on concrete pilings in 1990. The four homes just across the street, fronting the beach, were destroyed. Until they get rebuilt, she has a clear view of the Gulf of Mexico. She’s not going anywhere. Not even for a million dollars.
“Everything is solid wood,” Hourigan says. “We didn’t get much damage other than drywall—and part of the floor caved in. The water came up to the second floor, and waves were coming over the house.”
That damage hasn’t deterred the phone calls.
“We get phone calls all the time still,” Hourigan says. “Unsolicited calls. Lots of people. I don’t even know how they get your phone number. My husband is an avid paddleboarder and windsurfer. We love it here.”
Hourigan, however, knows the landscape of her beloved beach will be changing soon forever, starting with the four lots across the street. She recalled the days of her two sons being young, playing on the beach and playing youth baseball games at a nearby park.
“It was like we had our own little community,” she says. “Now, everything is going rental. Everyone is selling their house, and they’re becoming rentals.”
Champions of charm
Orlandini is embracing the change, though he hopes that includes restoring some of the charm. His company builds some of the multimillion-dollar homes on the island. He wants those who rebuild to pay tribute to the way things were—and he can control some of that, because he bought a Times Square parcel for $1.3 million.
“I think we’re going to come out of this in a positive way,” Orlandini says. “There’s a lot of fear in the community, in people selling out and big corporations coming in, and losing the charm of the island. It’s going to be very hard for that to happen, because we have a land development code that’s already in place.”
Fort Myers Beach incorporated in 1995 as a response to the Lee County government allowing DiamondHead Beach Resort’s 16-story height, which went against the wishes of the beach citizens at the time. Those land development codes will be put to the test now. Because with soaring property values and insurance costs will come the desire for developers to pack in more density to get the bang for their bucks.
Newly elected Fort Myers Beach Mayor Dan Allers said he’s open to amending the height restrictions, but it has yet to go on the town council agenda.
“I would certainly say that it’s not going to be a beach full of DiamondHeads, at least not for as long as I’m involved,” he says.
But Allers and Vice Mayor Jim Atterholt, in separate interviews, each suggested looking at increasing height and density on a case-by-case basis.
“All the developers I speak with relating to small and medium-sized hotels—because of the costs involved, they’re going to need additional density,” Atterholt says. “I think the council understands that. In return for that density, there’s going to be a request for some type of public benefit. Every redeveloper needs to rethink about how additional density impacts traffic.”
Ideas to ease traffic while boosting density include building pedestrian walkways over streets and starting boat ferries; moving people along the beach but not on the roads.
The town’s government also will be tested by finances as it rebuilds the tax base. And by the need for building permits. In 2021, the town issued 1,894 permits. In 2022, it issued 2,243 permits, including 900 after the hurricane. In just the first five weeks of 2023, the town has already issued 1,040 permits.
“They’re going to have to be able to permit a lot of permits,” says Matt Noble, the former principal planner for the town. “There’s going to be a lot of people who want to build quickly. They’re going to have to be a permit machine and get the permits out in a timely manner.”
Data can deceive
In the conference room of LSI Companies, a Southwest Florida land brokerage firm, founder Randy Thibaut and his son, CEO Justin Thibaut, held court regarding the future of Fort Myers Beach real estate.
Some of that picture remains cloudy, but it will start to get clearer in the weeks ahead. Closings will start to accelerate in April, they said, because six full months have passed since Hurricane Ian. It takes that long for insurance adjusters to examine the properties and for homeowners to decide how they want to proceed. It also takes that long for sellers to emerge.
“Vultures come in,” Randy Thibaut says. “It’s a different kind of vulture. It’s not vultures looking for the steal; it’s a vulture looking to get its hands on anything. It’s now going to be a luxury destination.”
Justin Thibaut put it this way: “A lot where a home has been demolished or will be demolished is selling for more than a home on the beach was previously selling for. There’s no way, whether you want to or not, to stop it.”
The “old fishing village” that began at Fort Myers Beach cannot be replicated. But the former residents who cannot afford to stay in their own properties won’t be leaving empty-handed, either.
“This is creating millionaires out of the people who are selling their properties,” Justin Thibaut says. “The event was devastating. But if these folks are smart, they can make a significant amount of money.”
That said, the expectations of the sellers have gotten out of control, Randy Thibaut said.
“Sellers don’t know how much things are worth,” Thibaut says. “So what happens is, their listing agent says, ‘Name the sky.’ Because they don’t want to lose the listing. People are afraid to list too low, because they don’t want to miss out.”
In the first four months after the hurricane, there were 142 properties that sold for a combined $120 million, Realtor Alex King said. That’s an average of $845,000, which falls in line with typical beach property values over the previous 12 months.
But looking at listings in mid-February told another tale, and it fell in line with what Randy Thibaut said. Nelson Taylor, the vice president of market research for LSI Companies, pulled the data. It’s deceptive, because the new listings do not match the recent price histories of deals that closed.
The top 25 lot listings, just for the raw land on Fort Myers Beach, ranged from $1.7 to $4.5 million. The top 25 home listings on Fort Myers Beach ranged from $1.95 to $9.99 million. The home priced at just under $10 million sold in March 2022 for $4.35 million, property records show. It’s priced 129% higher, less than a year later and less than six months after Ian.
“That energy is going to unfold over the next six months,” Randy Thibaut says. “There’s a lot of rumors and a lot of numbers being thrown out there that makes people think their properties are worth a lot more than they are. The places that got hit the hardest have the most interest. There’s a boom on what got hit the hardest. Let’s see what closes.”
Hurricane Ian wrecked much of Fort Myers Beach, but it did not ruin the real estate market. If anything, it accelerated what already had been booming.
Nelson Taylor, vice president of market research for land brokerage firm LSI Companies, looked at the data from Lee County Property Appraiser’s Office and came to one conclusion: It’s too soon to make any conclusions on the beach real estate scene.
“The same thing was going on before the hurricane,” Taylor says. “You can have a $4.5 million home. Next door, there’s a 1970, single-story, 1,200-square-foot home selling for $400,000. The numbers are never going to align, because you’re not talking about a singular use, where everything is the same.
“We don’t have sufficient data yet to assess the change.”
There were 425 homes that closed on Fort Myers Beach in 2022 (including the only one that sold in October), totaling about $400.8 million and averaging about $943,058 per home.
But a look at the top 25 home listings in mid-February showed prices ranging from $1.9 million to $9.9 million. And the top 25 land listings ranged from $1.7 million to $4.5 million.
Prices are on the move on the beach, and they are trending upward.
Here’s a month-by-month look at the number of homes sold, the average price and the total price from January 2022 through January 2023.
– David Dorsey
Hurricane Ian was a terrible disaster for Southwest Florida, there’s no disputing that. But every disaster also presents an opportunity: The landscape is wiped clean and everything has the potential to be rebuilt better to replace what was lost, whether the disaster was a hurricane, earthquake, fire or flood.
But what constitutes “better?” There are always different interpretations. After past disasters, people recognized the possibility of new starts … but there’s also the strong urge to restore exactly what was in place before. Southwest Floridians are hardly unique in considering dramatically different paths after Ian.
The dilemma can be traced back as far as the great fire of Rome in the year 64. After the fire destroyed two-thirds of the city, Rome was rebuilt with fire protection in mind. New building codes (yes, they had them then) required solid walls without wood or combustible material. Buildings could not share walls; each had to have its own as a fire precaution. Streets were laid out according to a regular plan, with broad, measured thoroughfares and height restrictions—and some people complained because they liked the old, narrow winding streets that shaded them from the sun.
After the Great Fire of London devastated the city in 1666, architects, including the renowned Christopher Wren, drew up plans for a new, rational London of broad streets and modern architecture. However, Londoners were in such a rush to rebuild that they ignored the plans and proposals and tried to restore what went before, including medieval streets and rickety tenements. One of the only vestiges of the more sweeping proposals was a new St. Paul’s Cathedral designed by Wren, which stands to this day.
Closer in time and nature to Southwest Florida’s ordeal was the experience of New Orleans following Hurricane Katrina in 2005. That cataclysmic storm overtopped the levees protecting the below-sea level city, which was almost completely flooded, especially wiping out poorer neighborhoods.
Would the old, funky, “laissez les bons temps rouler” New Orleans prevail or would it be a more structured, protected city? Or would it even be rebuilt at all?
Architect and urban planner Frederic Schwartz, who was hired by the New Orleans City Planning Commission, saw the opportunity for a new city rising from the flood.
“The planning of cities in the face of disaster (natural and political) must reach beyond the Band-Aid of short-term recovery,” he wrote in an essay on the project. “Disaster offers a unique opportunity to rethink the planning and politics of our metro-regional areas—it is a chance to redefine our cities and to reassert values of environmental care and social justice, of community building and especially of helping the poor with programs for quality, affordable and sustainable housing.” Schwartz died in 2014, never seeing his vision fully implemented.
Several broad plans made a determined effort to maximize community participation in the rebuilding. However, renewal was complicated by racial tensions, corruption (former Mayor Ray Nagin was convicted of charges of fraud, bribery and money laundering and is serving a 10-year sentence to this day) and the sheer scope of the task.
“They ended up with an uneven recovery,” said David Hammer, a journalist with the New Orleans Times-Picayune and currently with 4WWL TV in New Orleans. Hammer has been covering the story for 16 years.
Ultimately, $116 billion was poured into New Orleans by federal, state and local governments, Hammer said. However, “no amount of money can overcome faulty processes and bureaucratic entanglements,” he says. After disaster strikes, “there will be pressure to do this as fast as possible. But doing it in as smart a way as possible is really more important in the long run. The problems in New Orleans came from being in a rush.”
The recovery effort has continued to this very day. For example, it was not until last May that the U.S. Army Corps of Engineers finally handed the state a fully completed Hurricane and Storm Damage Risk Reduction System of floodgates and improved levees. Problems of race and class remain, with one study last year finding that poorer homeowners received less in grants to rebuild than wealthier residents.
In contrast, one of America’s most successful disaster rebuilding and recovery efforts occurred in Greensburg, Kansas, where on May 4, 2007, an EF-5 tornado swept into the small town of 1,400 people, virtually wiping it off the landscape, killing 12 and destroying 95% of the housing.
The town’s council, meeting in a parking lot, decided that when they rebuilt they would do it in the most energy-efficient and environmentally friendly way possible. That decision led to increased federal and state support.
Today, Greensburg is completely rebuilt. It gets all its energy from a wind farm. Its public buildings are state-of-the-art in energy efficiency and the town makes use of everything from low-flow toilets to drought-resistant landscaping that uses minimal water. Now with a population of 900, it is considered a world-class example of successful disaster recovery.
“For the most part, everyone who wanted to return has done so; it’s all done,” Mayor Matt Christenson says. “We’re 100% on renewable energy since 2008. It’s worked out great. It’s very stable.”
There was some tension between residents who wanted to formulate a master plan and those who wanted to rebuild their homes and businesses immediately, Christenson recalled. But the town officials chose not to impose mandates on residents. Instead, they used education and persuasion to convince residents to go the new route and accept some of the higher costs involved. Ultimately, they all agreed.
Christenson also acknowledged that the town was lucky in that it didn’t have to drastically rezone anywhere and could rebuild neighborhoods where they were, in contrast to Southwest Florida coastal areas that are still in flood zones. That made the recovery process easier in Greensburg.
By and large, Greensburg got through its ordeal by plugging ahead, according to Christenson. It took three months just to clear the debris. There are still some lots that remain vacant. As in Southwest Florida, affordable housing is a challenge.
“There are good days and bad days,” Christenson says of the years since the tornado.
For Southwest Floridians, he advises: “Just know that you’re not alone; keep working at it and if you keep plugging away, you’ll get through it.”