Southwest Florida Real Estate Market Growing Too Rapidly

Dr. Hank Fishkind, one of Florida’s premier economic consultants, echoed earlier statements today about the state of the Southwest Florida real estate market. He said that the exponential growth in the residential industry is too rapid and will not be sustainable when compared to the population growth.

“Over the past year we have seen an explosion of activity for new residential building permits,” said Dr. Fishkind, principal of Fishkind & Associates. “This exponential growth is too rapid when compared to the population growth in the area that only increased by 9.7 percent in the last two years. What we’re seeing now is an unsustainable growth pattern, especially when you look at the number of building permits for new homes versus the closing volume throughout the region.”

According to data, the closing volume in November for new single-family homes increased to 587 units, up from 566 units in October. Meanwhile, data from the Lee County Economic Development Office showed that single-family building permits in November dropped to 1,104, down from 1,408 permits in October – revealing an 88 percent difference between the closing volume of new single-family homes and building permits in November and a 217 percent difference in October.

This pattern is repeated across almost every single market in southwest Florida. For instance, November closing volumes for new homes in Charlotte and Collier Counties dipped to 11 units and 159 units respectively, down from 14 units and 195 units in October, continuing to show declining closing volumes and the cooling down of the market.

As this trend continues, sellers will lower prices. A Florida home loan will be easier to afford when there is such a need for balance across the market.