Market Trends: Experts both optimistic, cautious, on local real estate
Area real estate is seeing the type of boom it hasn’t seen since 2005, with the prices of housing, commercial and office space climbing at near historical levels.
Southwest Floridians who have been around a while likely remember what happened a few years after the crazy climb.
Industry leaders attending the recent Market Trends summit at the Caloosa Sound Convention Center & Amphitheater in Fort Myers provided some clarity. They say even though the conditions now are similar to what they were in 2005, another devastating bust is not in the offing though a return to normal — where an “irrational market is being replaced by a rational one” — may be.
The data, research and analysis presented at the Caloosa Sound Convention Center & Amphitheater in Fort Myers was intended to help homeowners, home buyers, real estate professionals and Southwest Florida understand latest trends in the real estate market.
That trend has been sharply upward as real estate of all kinds is selling for prices that are approaching those that preceded the last real estate bubble.
Randy Thibaut, founder, owner and CEO of LSI Companies, addressed land, new homes sales and development, and said that because so many people want new homes, demand has created issues in supply, pricing, materials and labor. This has served to drive prices even higher and could lead to a price fall.
“We have people who want to leave their apartments and move into a home and they hit the wall and got priced out,” Thibaut said. “The theme has been stalled jobs, not enough materials and no labor. It’s frustrating.”
Thibault said that areas such as North Fort Myers are finally seeing the start of great development. More than 1,000 units will soon be going up at Oak Creek/Chapel Creek.
Many more will soon be going up at Paradise Isles.
Whether — and when — the reset button might finally be set is the big question.
“There’s no playbook. Whatever happens, happens. There are no reminders at the door with someone saying ‘Guess what?’ When prices hit the wall, be ready to react,” Thibault said. “Optimism is good. Reality is better.”
Denny Grimes, president of Denny Grimes & Team at Keller Williams Realty, said that the media has fed a frenzy over how the market has dipped in recent months, leading some to believe the end was near. In reality, the market is still double-digits better than it was even just two years ago.
“Don’t be fooled when you see negative numbers come out, because it’s still performing very strongly,” Grimes said.
Still, there are markets that are experiencing “scorched earth” growth of over 100 percent, which is very worrisome. He called it a “Market in a Million” with records we likely won’t see again.
The cases Grimes made for a correction include record low consumer sentiment, deceased mortgage applications, prices at an all-time high, decreasing home sales, global economic unrest, inflation and an influx of inventory anticipated.
“Peak insanity is over. We’re going back to normal. We’re not going to crash,” Grimes said. “The irrational market is being replaced by a rational one. The market will remain above average because people are motivated to leave where they are than move where they’re going.”
Justin Thibaut, president and partner of LSI Companies, talked about commercial development and said many retail businesses are leaving the malls and going to areas you wouldn’t expect.
He used North Fort Myers and Lawhon’s Market as the example (which drew applause) of a small footprint and a one-stop shop.
“You can get everything from a family dinner to a roll of toilet paper and a tank of gas and they’ve been in business 50 years for a reason. They deliver what folks want,” Thibaut said. “Small neighborhood retail is where they’re transitioning to and maybe the retail future is an adaptation to the retail past.”
There are questions regarding offices, especially since COVID made many work remotely. Thibaut said that many offices are offering more amenities to their workers than just a cubical, and that there is a lack of high-end office space in Southwest Florida.
Medical offices are exploding, however, and there are many companies out of state that want to come to Florida, into offices that are able to absorb them.