As the classic Eagles song “Life in the Fast Lane” played on the Caloosa Sound Convention Center speakers, Randy Thibaut took the stage with about 1,000 Southwest Florida real estate stakeholders in front of him Wednesday at Market Trends of Southwest Florida.
The song at the end of this year may not be as up-tempo, as Thibaut spent about 30 minutes putting the data of soaring real estate sales and prices into perspective.
Thibaut talked about dopamine. The naturally released brain chemical that signals pleasure and rewards. It has flowed in abundance among real estate sellers over the past year.
“People are coming in here in droves, with cash,” Thibaut said. “When you’re on it for this long enough, what happens is you forget fear, uncertainty and doubt.”
A residential property in Cape Coral selling for $267,000 in early 2020 sold for $366,000 in late 2021. That’s a 37% increase.
One within an Estero subdivision sold for $385,000 in early 2020. It sold for $683,000 in late 2021. That’s a 77% increase.
Thibaut’s next slide during his presentation drew some laughs. The listing of a house for sale for $299,900 showed the photograph of a child’s playhouse.
But Thibaut and his team of researchers at the land brokerage firm LSI Companies did not expect a big bust following the current boom.
That’s because in 2005, there were a record 44,000 permits pulled in Lee, Collier and Charlotte counties. Those crashed to just 2,066 in the year 2009 as the Great Recession reached its apex.
In 2020, there were 18,418 permits pulled in the three-county area. In 2021, there were 25,184, an increase of 37%.
“But 25,000 permits is not 44,000 permits,” Thibaut told the gathering. “I want you to focus on this; 10,000 people want to buy a new home. We can’t build them fast enough. We don’t have the supplies to do it.
“You’re not going to see that number of 44,000 again. A lot of people who came down here to buy a house and couldn’t afford it, they’re renting right now.”
The top three Southwest Florida communities for growth are: Ave Maria (780 new home permits pulled), Babcock Ranch (729) and River Hall (410). All three of those communities are located well inland.
“It’s not about location,” Thibaut said. “It’s about availability and lots to build on.”
The top four Southwest Florida home builders in 2021 in terms of permits pulled are: Lennar (3,171), D.R. Horton (2,058), Pulte (1,577) and Brooks and Freund (1,523), the latter of which focuses on building apartment units.
The influx of new Florida residents has sent supply spiraling downward, which has sent prices of both apartment rentals and single-family homes climbing upward.
Thibaut broke down some of the recent record-setting land deals:
Valencia/Terreno off Oil Well Road in Collier County: Pulte bought 320 acres for $35 million, about $109,000 per acre, where it plans to build 685 homes.
Tuckers Point in Punta Gorda off U.S. 41 and Tucker’s Grade: GreenPointe Communities bought 507 acres for $16.67 million. It plans to build about 1,689 units plus some commercial real estate. That’s $33,000 per acre. The same land sold in 2017 for $6.5 million.
“So what now?” Thibaut concluded. “Well, the good news is, we can’t crash. But we could have a softening ahead. Buyers are hitting a wall on pricing. Rising interest rates. Supply chain continuance. Recession? All of these factors are going to make a big difference to the buyer.”