Despite double-digit percentage increases since 2011 (ranging from 30-70 percent) for residential building permits in Lee, Collier and Charlotte counties, the actual number of permits (expected at 12,500 for 2015) are just now back to 2000 levels. “The perception is that we’re on fire and it’s never going to end and we’re fully recovered. The reality is we have good news in that we’ve made strides toward recovery, but we’re not there yet,” says Randy Thibaut, owner and CEO of Fort Myers-based Land Solutions. “We just surpassed year 2000 permits this year, so we are just getting into a sustainable market again.”
Deals have dried up. There’s more competition for land. Labor is limited and materials are more expensive, he says. “We don’t have enough labor to support the development that’s occurring,” Thibaut says.
He expects to see a leveling off in permits, to around 13,000-14,000 for the three counties in 2016, while home sales remain solid. The tear-down trend, from Cape Coral to Marco Island, will continue so that people can build new homes with water views.
Apartments, which have been the hottest sector in the last 36 months, will continue to be added to the landscape, due to folks being priced out of the market and millennials with no interest in home buying. In apartment development, commercial contractors are outpacing residential homebuilders.
Ave Maria was one of the fastest-selling communities in Southwest Florida in 2015, according to Land Solutions. Its success is due to a mixture of price (homes start in the low $200,000s) with a Naples address that Thibaut says even is attracting folks who are commuting to Florida’s east coast.
IN FIVE YEARS:
Thibaut expects that Estero, with its availability of land, cheaper government fees, growth in shopping options, access to I-75 and Florida Gulf Coast University, will emerge as a major player in the development scene. It will become the next north Naples, especially if workers have to start heading north again for affordable housing.
Northeast Collier County, particularly the Immokalee Road corridor, is the future of Collier for housing growth, but only if the government encourages the development of affordable housing (under $400,000) there, Thibaut says. If not, he expects the workforce will begin heading north again, like they did during the boom, to Lehigh Acres and Cape Coral, which already has bounced back from having the highest foreclosure rates in the nation. Markets in North Fort Myers and Port Charlotte will heat up again because of affordability. The most predominant growth in Southwest Florida will be hugging I-75, Thibaut says.
Hendry County officials are preparing for folks—developers and potential home buyers—looking inland for cheaper land, a lower tax rate and no impact fees. The county is watching home prices rise in Lee and Collier counties and is ready for building, says Hendry County Administrator Charles Chapman.
“Eventually we’re going to be hearing about the same groans from the growth pattern in Lee and Collier, where available inventory that is affordable for individuals is just not there,” he says. “People [will] naturally start gravitating. We have available lots for those individuals.”
Other markets to watch: the luxury high-rise market in Naples and Bonita Springs and south Lee County communities such as WildBlue (between Alico and Corkscrew roads in Estero and planned for 1,000 homes) and Del Webb’s Tidewater, an age-restricted community planned at Ben Hill Griffin and Estero parkways. The booming senior housing and assisted living market, like apartments, is expected to continue to experience solid, steady growth, but Thibaut is watching for overbuilding.
IN 10 YEARS:
Millennials are forgoing buying homes for a multitude of reasons, such as existing debt from school loans, frequent job changes and a mobile lifestyle. They may not be buying in 2016 or 2017, which can cause a lag in the market. It could even be a 10-year gap in the market, as the region’s demo- graphics shift to a diminishing pool of wealthy retirees to baby boomers (some of whom will remain in the workforce) and millennials. But as more millennials move into the season of life when they have kids, they will start buying homes. For some, that could be in 10 years.
New construction, roadway improvements and continued gentrification in Fort Myers Beach will give it a facelift during the next 10 years.
IN 20 YEARS:
What are now considered fringe areas, such as Hendry County, may become the next hot spots in two decades. Of Hendry’s 758,000 acres, about 160,000 are conservation land that cannot be developed. But the west side of the county—bounded by Lee County, Glades County, SR 29, SR82 and Collier County—offers more than 67,000 acres that have been pre-entitled for 6,700 residential units and 11.4 million square feet of retail and other commercial space. The county’s major roadways, SR80, SR29 and SR82 (which gets people to Southwest Florida International Airport in about 35 minutes) are undergoing improvements or are slated to be improved in the next several years. The county will try to lower some permit fees and create more streamlined zoning and building processes, Chapman says. Possible major multi-year projects include a new Florida Power & Light plant on County Road 833 near Big Cypress Seminole Indian Reservation. If the county’s sleepy general aviation airport becomes a perishable cargo reliever for Miami International Airport, Hendry could become an “international launching pad” that would boost development and job growth, Chapman says.