FORT MYERS, Fla. – Those who think the extraordinarily bullish real estate market of the last year just can’t last – that a significant dip is inevitable, and sooner rather than later – are probably wrong this year, according to three of the savviest market analysts in the Southwest Florida region.
On the contrary, residential (both new and existing homes), commercial and land sales markets in Collier, Lee and now Charlotte counties, will grow not only in size but in value and cost for the rest of the year, say expert analysts at LSI Companies, who backed up their promising predictions with a detailed databook they share as a service throughout the industry.
“The change in the market has been incredible since last year,” noted Randy Thibaut, founder and senior broker at LSI, speaking last week to nearly 1,000 real estate professionals from throughout the region. They gathered at LSI’s bi-annual and signature event, the spring 2022 Market Trends, held in the Calooosa Sound Convention Center adjoining the Luminary Hotel and restaurants overlooking the Caloosahatchee River in downtown Fort Myers.
“Permits went up in Lee, Collier and Charlotte counties almost 37%, so we’ve had another surge in new-home building,” Mr. Thibaut said. “We’ve reached a peak of 25,000 permits this year, but that’s not a boom. A boom is 44,000 permits in 2005. But we’re still in a really good market.”
The picture is robust and promising, the LSI analysts said, not a boom market but a prosperous, dependable market for the time being. Chasing deals – chasing good buys and good sales in residential, commercial and industrial real estate, and in land sales and development, will be a “thrill,” because the downsides do not include a crash or a huge dip.
But Justin Thibaut, who recently took the company wheel as president and CEO, offered some characteristic caution to investors in the industrial sector.
“It’s really easy to get caught up in the fanfare of what’s happening in residential and commercial real estate in Southwest Florida,” he said, “but the big headlines don’t necessarily translate into everybody that’s working and doing business in the community.”
In industrial real estate, for example, “big distribution businesses are entering and we’re hearing about big and bigger deals. The problem is, the assets are not available to purchase. The sales volume in the industrial world is decreasing, because there’s nothing out there to buy, so it’s bringing waves of new deliveries into the market.”
The result? “There’s a lot of (warehouse) construction in Collier and Lee, and it’s starting to happen in Charlotte County – which is probably next on the map for big distribution. Warehouse distribution.”
Denny Grimes, founder and president of Denny Grimes & Co., joined the LSI analysts as the expert in existing-home sales. The market will continue to be good, but not crazy, he suggested to the packed house.
“2021 was a record that will never be reproduced in sales, in prices – it was a once-in-a-lifetime or generation market. So we can’t compare 2022 to 2021, which is not going to repeat itself. And that’s the good news.”
In residential real estate, Mr. Grimes pointed out, “We do not have a demand problem.” People want to live in Southwest Florida, he said, unlike in a lot of other places. So the problem is not demand, but cost.
“We’re getting a lot less affordable. The good news for southwest Florida is, although we’re more expensive, there are a lot of people out there who can afford it. And they will come. And our market in 2022 will be great – just not as great as in 2021.”
Like a couple of stunt drivers who make it look easy when they change seats at full speed, Randy Thibaut and son Justin traded places in the driver’s seat at LSI Companies earlier this year then glided into last week’s spring 2022 Market Trends event as smoothly as warm butter.
Randy founded the original company a couple of decades ago. Justin came to work with his father in 2016 after graduating from the University of Florida’s construction management school and working in the nuclear power and petroleum industries for a few years. Now Justin has stepped in as president and CEO, with Randy continuing as founder and senior broker.
That might seem like just another business evolution except for one factor: A lot of people think they’re better analysts of development and real estate trends in the region than most. Or than any.
The good news, as their admirers see it, is this: They share what they know.
As with each Market Trends event, this soiree, called “The Thrill of the Chase” after good real estate deals, came with a databook for participants chock-a-block with information, a relative wealth of research that could enhance the understanding of construction companies and developers, buyers into projects or sellers, industrial and commercial real estate investors and those simply looking to buy or sell a home.
You can see, for example, general information such as unemployment rates in each county, or more specific data, including diesel fuel costs, aluminum or copper and brass mill shapes, or steel mill products.
You can see the costs of lumber and plywood, gypsum products, ready mixed concrete and paving mixtures.
You can see the number of residential permits issued not only by county, but by builder, for single-family homes, multi-family units and apartments.
You can see new home construction numbers for single-family detached and multi-family homes listed by town, unincorporated area or the region. You can see who got the permits by builder and by community.
You can see median sales prices for communities, available stock, and the average time in days stock stays on the market.
Knowledge is not just power, it can be freedom.
Matt Walsh, founding editor and CEO of the Business Observer who customarily introduces Market Trends events, attributed the robust and promising market to “freedom” in a time when there’s plenty of bad news and restrictive policies: “inflation, build back dumber, COVID mandates, the Southern border crisis … but we are fortunate because we live in the freest state in the U.S.,” he declared. “When you have freedom, good things happen. No matter what happens, Florida is going to be fine … we made it through the 2020-2021 pandemic better than anyone else!”
Whether that’s true or not, the real estate reality is a lot better than anyone thought it could be at the start of the decade, and it will continue to be better for the foreseeable future this year, Randy Thibaut concluded.
The reason is simple. “We have people coming here with cash!”
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