Coming off perhaps the strongest and most surprising real estate month in at least a year, this probably shouldn’t come as a surprise.
Southwest Florida is one of the America’s hottest housing spots despite an overall slowdown nationally.
“Buyer hesitancy has no place here in Southwest Florida,” said Realtor Aprile Osborne, co-founder of Naples-based Call It Closed International Realty. “We’ve seen plenty of excitement in the market, including new developments and fresh homes, and there is plenty to look forward to as our region grows.”
Lee County has been crowned among the Top Four U.S. home markets to watch by Insurify, which cites the area’s construction boom and skyrocketing property values. And winter residents beginning to arrive are part of the party.
“As we’ve seen for decades past, snowbirds are here and ready to buy,” Osborne said. “In fact, our seasonal residents are arriving earlier and earlier, proving that Southwest Florida’s resilience keeps us at the forefront of non-locals’ minds.”
What are the three Florida metros in America’s hot Top 5?
Two other Florida locales are in the Insurify Top 5, with Sarasota in the pole position and Orlando just behind the No. 4 Cape Coral-Fort Myers slot, and the chief economist of the National Association of Realtors says this decade’s coronavirus first helped set the stage.
“You had a real estate boom,” said Lawrence Yun, who was at a recent Naples Area Board of Realtors summit. “When there is a pandemic, people want to get away from big cities. You even see that in the past history. Black Death that occurred in Europe 500 years ago when there was a pandemic, everybody went to the countryside. (This time), some people came to Florida next to the ocean. Certainly, you get the sea breeze and not next to a person who may breathe on you.”
Insurify, an online insurance agency, used permits, population change and demographic stats from the Census Bureau, along with Zillow figures and an internal database of insurance quotes, to score and rank the 75 most populated metropolitan statistical areas in the United States. Collier County’s smaller size kept it out of the study, but Yun said it has had a lot going its way in recent years.
“You are in a great county. (When) I look at the statistics ― this is pre-COVID ― I look at where the wealthy people are moving.” Yun said of Collier, Virginia’s Loudon and Colorado’s Douglas. “These three counties attract the wealthy movers in America, and consequently (in Collier), prices up 88% from pre-COVID to today here. You are looking at a minimum $250,000 in wealth gain for property owners. (From) 2019 onwards, you are looking at $200,000, $300,000 in housing wealth gain.”
How did Hurricane Ian affect SW Florida’s housing market?
Currently, Lee County has seen a year-over-year decrease of 24% for approved residential units under construction, attributed to Hurricane Ian’s September 2022 battering. However, like Collier, it still has a large number of abodes being built compared to nearly the rest of the continent and strong data in other categories, helping lead to the high ranking, according to Insurify.
“The properties that were damaged beyond repair were likely obsolete structures that needed to go,” said Cindy Carroll of Carroll & Carroll Appraisers & Consultants, who participated in the recent summit. “Redevelopment from the storm was overdue, and the new construction will help to increase values.”
Insurify researched that Lee had the second highest number of new residential units under construction when accounting for existing population, with 191.13 residential units under construction for every 100,000 residents. The Sarasota metro ranked first.
“Although hundreds of homes along Fort Myers Beach and along our waterways were destroyed, we’ve already seen homes popping back up,” Osborne said. “View the redevelopments through a lens of optimism: Everything is becoming new. Families are replacing the material things, essentially creating brand new houses. Typically, when something in the home is improved, the value of the home immediately goes up. Ian-caused remodels are no different.”
How did Lee County’s growth compare to the rest of the nation?
A driver dating to the pandemic era: Lee has experienced some of the highest population growth over the past two years in the republic with an 8.1% jump from 2020 to 2022.
The country overall has increased by just 0.6%.
“I’ve seen a surge of interest in Sanibel, Captiva and Fort Myers Beach,” Osborne said. “In Southwest Florida, we’re here to boat, beach and enjoy life in paradise. Being on the water is our form of happiness, and no storm will stop that.”
The Insurify findings come as In the Know found this month that sales surprisingly surged in the newest statistics for the region’s three larger real estate associations after a lot of dipping the past two years.
“Twelve months after Ian left its mark on Southwest Florida, the housing market has certainly shifted, (and it) hasn’t necessarily shifted in a bad way,” Osborne said. “Recently, we saw that the Red Coconut RV Park (was) purchased for $52 million. For a community still reeling from the effects of a monumental disaster, these numbers and trends are amazing. (To) their disbelief, homeowners have watched the value of their waterfront homes shoot up.”
What are the major hurdles for Southwest Florida’s future?
Still, Southwest Florida has other hurdles to overcome.
Lee County continues “to see an astounding increase in new housing developments (despite) a high risk of damage from natural disasters,” the Insurify report concluded, noting it among the highest FEMA risk ratings with a 99.5, only behind flood-prone Houston’s 99.9 and San Jose’s 99.8 on its list.
Resort::Would Great Wolf Lodge have come to SW Florida without $15 million in incentives?
San Jose, where California regulations have helped keep rates lower, has an average annual insurance cost of $840. That’s despite the threat of earthquakes. On the other end of the spectrum in Florida, Lee checked in at $2,568, behind Sarasota.
Florida “has the highest home insurance rates in the country,” the report said, noting the dramatic effect of climate change on the Peninsula. “Climate risks explain the higher-than-average rates. (Prospective) homeowners should bear in mind the sky-high cost of home insurance in Florida when making a purchase.”
And there are unknowns if President Biden isn’t re-elected.
“Buyers, sellers and investors generally are looking to avoid the uncertainty that comes any time a new administration could come into office,” Osborne said. “Historically, we see more hesitancy when presidential elections approach.”
Biden this year ended the public health emergency declarations started by his predecessor with COVID-19.
“From lockdowns to hurricanes, I feel like the market is just trying to adjust, as are families,” Osborne said. “As society returns to normal, families looking to move to Florida are having to consider the possibility of their remote positions becoming in-person again. Will they go back to the area that they are originally from, or will they continue their journey to Florida?”
In the Know:Are golfers behind surprising SWFL sales surge? And who’s buying country clubs?
What is Insurify Top 10 for hottest markets to watch in the U.S.?
- Greensboro, North Carolina
- Raleigh, North Carolina
- Fort Myers
- Knoxville, Tennessee
- Columbia, South Carolina
- Charleston, South Carolina
- Charlotte, North Carolina
Based at the Naples Daily News, Columnist Phil Fernandez (firstname.lastname@example.org), who grew up in Southwest Florida, writes In the Know as part of the USA TODAY NETWORK, which supplemented this report. Support Democracy and subscribe to a newspaper.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.