Developers of new properties in Southwest Florida can expect a positive outlook for the rest of this year, says a market trends report for the region. Basing their forecasts on figures for property, population and employment trends, the report concludes that new-home starts can look forward to a strong 2017.
Land Solutions based in Southwest Florida releases a quarterly review of market trends in the three counties that make up the region: Charlotte, Collier and Lee. The report looks at the main factors behind demand for housing, namely population, tourism and employment. In this article, BRIC Group summarises the highlights and key facts in the Q1 edition.
Demand for new properties in Southwest Florida
One of the biggest sources behind demand for new homes in the region comes from new residents. Southwest Florida ranks among the fastest-growing regions in the US – between 2000 and 2016, the population rose by over 50%. Latest figures from the US Census Bureau show that the number of residents went up by almost 3% in 2016 alone and new population projections point to more of the same between now and 2050.
Retiring Baby Boomers make up a sizeable percentage of the new residents. US Census figures also revealed that 43.6% of the Southwest Florida population is over 55. According to the Land Solutions report, “future growth in Southwest Florida will be due largely to record numbers of Baby Boomers retiring and migrating south”.
The report highlights the attractions of the region – pleasant year-round climate, some of the best beaches in Florida and excellent golfing and boating opportunities. All count as major draws for affluent Baby Boomers and boost the market for new properties in Southwest Florida.
Employment in Southwest Florida
Job creation also features as a major factor behind demand for new properties in Southwest Florida. The region, whose economy is predicted to “fire on all cylinders” this year, experienced low unemployment in Q1 2017. In March, both Lee and Collier counties both had a 4% jobless rate, while Charlotte County registered 4.6%. All three came in at lower than the state average (4.8%).
Tourism in Southwest Florida
Tourism statistics also help to predict demand for homes. Judging by passenger figures at Charlotte County Airport, the holiday industry was brisk during Q1 this year. The airport that offers domestic flights from the Midwest, Northeast and Southeast saw an increase of nearly 24% in passenger traffic during the first three months of the year. According to the Land Solutions report, “Charlotte County Airport will be a major economic driver in the future, which is likely to present opportunities for homebuilders, developers and the like”.
Domestic visitors form the backbone of tourism in Florida. In Q1, the Sunshine State welcomed 31.1 million tourists, 2.5% more than the same quarter in 2016. Although figures for international visitors fell slightly, those for domestic tourists went up by 3.2%.
New home market in Q1 2017
The 3,345 permits for new properties in Southwest Florida issued during Q1 represented the best first quarter since 2006. All three counties saw an uptick in permit issues.
Further proof of demand for housing came in statistics for house prices in the area. The median price in Q1 was the highest since 2007. However, despite the rises, Land Solutions point out that house prices still lag between 14 and 19% behind their peak registered in Q3 2006.
Shortfall of new properties in Southwest Florida
Like most of the US, Southwest Florida suffers from a serious shortage of supply, both of resale and new homes. According to Land Solutions calculations made using population increase and average size of a household, the number of new properties required in Southwest Florida numbers 14,129. In the year to March 2017, 11,409 were issued, resulting a shortfall of almost 20%.
Despite record new permits in all three counties, supply still cannot keep up with demand. In Charlotte County, the authorities issued 986 permits for single-family homes in the year to March, an increase of 10.8% in the year. As the report says, “The current rate at which new residential units are coming to market in the three-county area is still well below what is needed to keep up with the population growth”.
Predictions for 2017
Strong demand looks set to continue throughout Southwest Florida as new residents relocate to the area attracted to its employment opportunities or retirement activities. The Land Solutions report predicts strong demand in “more affordable areas” such as Cape Coral and Charlotte County as a whole. In this county, the report also forecasts a rise in new home starts over the next 12 months.
“There’s clearly big demand for new properties in Southwest Florida,” says Dies Poppeliers, Managing Director of BRIC Group. “However, lack of available land and development mean supply isn’t keeping up. This opens a window of opportunity for investment in land and off-plan property.”
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.