By the end of 2004, real estate prices in SW Florida were rising at an accelerated pace. Sub-prime lending, zero interest loans, zero down payment and low interest ARMS that made home buying affordable to most consumers were being utilized to the fullest. With the increase in demand and a limited supply, home values began to sore. Florida reported an excess of 25% price increase from 2004 to 2005 setting real estate records.
New construction took off. If there aren’t enough homes on the market, what better time to start building them? SW Florida was a whirlwind of hammers, nails and construction vehicles clogging the roadways. The demand for new homes was at such an exorbitant rate builders could barely keep up… the US even ran out of drywall! (But that’s another story…)
Along came new rules cutting availability of sub-prime loans and the downward spiral began.
We all know what 2006-10 looked like in SW Florida, we’d like to forget, but we will always remember. Cape Coral was the epicenter and made world news for the record number of foreclosures. Once we hit bottom, we started climbing. By the end of 2013 the majority of foreclosures and short sales had washed through the system. Prices continued to climb at a steady, yet healthy rate. Cape Coral, Ft. Myers and the rest of Lee County started looking like a normal real estate market.
In 2014, permits for the new construction of single family homes increased 25.7%. A total of 2,999 single family permits were pulled by builders with 244 pulled in December.
Here we are, January of 2015. Everywhere you look you see a new home being constructed. Whether it is a luxury waterfront home or an entry level single family home on a non-waterfront lot, they are going up quickly. The inventory for existing homes is low. As it has always been for SW Florida, demand is high.
All the indicators are there. Lots are selling quickly, an easy way to turn a profit for even the smallest investor. Seems we are set to see that whirlwind of hammers, nails and construction vehicles clogging the roadways again. Our economy is growing and hopefully the harsh lessons of our previous boom will keep us in a healthy market.