What is happening in Lee County, Florida Real Estate?

If you are reading the local news, you might be feeling a little negative towards the Lee County Real Estate market.  Our July unemployment numbers have increased to 13% from 12.5 in June.  In May, there was some excitement because unemployment numbers decreased.  Some were touting the oil spill was putting people back to work. (I feel the opposite!)  In conjunction with an increase in unemployment we are showing a slow down in sales month over month.  Here is the bright side.

• WINTER IS COMING

I am hopeful for season in 2011.  I think the oil spill is directly related to the rise in unemployment.  I also believe it is partly due to normal hiring fluctuations of tourism season.  The AccuWeather prediction for winter 2011 in the United States is not very good for our friends to the North, but great for our tourism industry.  Tourism is a big part of our economy in Southwest Florida.  A big source of jobs.  AccuWeather also predicted:

"The best weather this winter will be in Florida. Bastardi suggests that Florida will be a great winter destination, with warmer-than-normal temperatures all winter long. We will also see warmer weather all along the Gulf coast, which could help the beach resorts recover from the economic downturn associated with the oil spill."

Our beaches have had no effect from the oil spill.  They are clear and beautiful.  Fortunately for us, the oil stayed in the Northern Gulf.  (I am not trying to minimize the effects of this disaster, and my hope is the northern Gulf recovers quickly)  This winter, I imagine we will see some visitors to the area that normally head to the areas affected by the oil spill for vacation.  I also believe that the normal "Holiday Hiring" will kick in, and bring some jobs to the area.  I think the oil spill had a significant effect on our local economy and the local real estate market.  At this time, it appears we may come through any physical effects of the oil unscathed.  If that holds to be true for the next few months, it will be a major confidence booster for employers and real estate investors.  The permanent solution for job creation is not Holiday Hiring and Seasonal Tourism Employment, but it will definitely help the economy.

The other major source of employment is Construction.  I still believe that with the drop in material, labor, and land prices and the fact that the inventory of  homes built since 2008 is so low, that we will continue to see a rise in construction permits.  There are new models opening throughout Lee County.  The News-Press recently published a positive article about Adams Homes who are building in Cape Coral and Lehigh Acres. Basically, the Building Company thinks they can compete with the distressed market.  I also think that they can.  There is nothing like a brand new home!   Hopefully, a rise in New Construction will bring jobs to the area.

Lastly, the drop in sales numbers is a concern for some real estate investors.  Typically for Lee County, August's  rate of sales decline in a normal year.  We were on track every month in 2010 to come close to the record sales pace of 2009 until May (expiration of tax credit and the dreaded oil spill).  One must also keep in mind that 2009 was the highest rate of sales on EVER!  This drop in activity to me is not a precursor of doom and gloom.  We are still a pretty active market. You can view all charts for yourself by following this link.

A bump in inventory may have a bright side, too.  The rate of absorption for Foreclosures in Lee County has been between 1.04 months and 1.56 months from January to June.  That is very low!  Every foreclosure on the market typically has multiple offers. The bump may also keep prices in check, as they rose 19%.  A bump in inventory could bring another incredible buying opportunity for investors and home buyers. 

Lastly, at our office, we have negotiations in progress for investors on vacant land and short sales.  If you are interested in Cape Coral Land or Short Sale anywhere in Lee County, give us a call at (239) 415-6500.