Workers Flee Overvalued Naples Housing Market

Beth Ireland spent a year looking for a $300,000 house in Naples.

Then she quit her job as a nurse manager and moved to Pittsburgh.

“It’s nuts. When all is said and done, we can’t afford to live in Naples,” the 54-year-old said.

A paradise on the Gulf of Mexico in Southwest Florida, Naples boasts more than 130 art galleries, posh hotels and private jet service, according to its tourism website. Jobs are plentiful, but home prices around $500,000 on average leave something to be desired.

But locals call it the “bubble city,” as Naples real estate has surged a ridiculous 140 percent since 2001. It has long been one of the most desirable housing markets in the country, driven by an influx of retirees and second-home buyers, according to numerous sources.

But now, as a result of the overvalued home prices, area teachers, nurses, paralegals and other middle-income workers are pursuing housing (and jobs) elsewhere. That makes it tough for area employers, which are giving big raises and housing subsidies but still finding it difficult to hire or keep staff. Things have gotten to the point where even upper-middle class professionals such as university professors are finding it hard to make the payments.

“We have a workforce housing problem of acute proportions. It is a crisis that will only get worse,” said Edward Morton, chief executive of NCH Healthcare System, which operates hospitals employing more than 4,000 people.

The hospital system provides apartments for 250 employees at below-market rates, and will house 150 more in the next several years.

THE ESSENTIAL WORKFORCE

The Naples-based Collier County School District raised pay an average of 6 percent on July 1. Still, no fewer than 15 teachers who planned to move to Naples withdrew from contracts that were to begin this month because of the cost of the Southwest Florida housing market. The district has 65 unfilled jobs, three weeks before the start of the school year.

The Collier County Sheriff’s Office hasn’t been able to fill almost 100 positions, even after offering signing bonuses of as much as $3,000 since January 1.

Naples has a population of 300,000 had an unemployment rate of 2.3 percent in May, near a 10-year low and half the U.S. rate of 4.6 percent. The city per capita income was $42,846 in 2004, ranking ninth in America among metropolitan areas. That figure increased 2.9 percent annually from 1994-2004.

Yet soaring housing costs, coupled with a steady increase in Florida home loans over the past year, has made it difficult for many middle-class workers to afford anything. Throw in volatile (and necessary) insurance premiums and you have a recipe for an affordable housing crisis.

Randstad USA, a staffing company that specializes in providing clerical and factory workers, has recently been inundated with requests from employers for a wide range of jobs, including engineers. The number of inquiries about relocating to Naples, meanwhile, is at a 12-year low.

Hospice of Naples, where Ireland worked, has lost about 10 percent of its 200 employees in the past year because of housing costs.

Home price appreciation, and subsequent affordable housing issues, extend across Florida. Miami, West Palm Beach, Sarasota, Fort Pierce and Punta Gorda are also among the 20 most overvalued U.S. markets. This June, the Florida Legislature passed a law to encourage area home builders to construct cheaper housing in coastal markets. The law provides tax incentives and loan programs and authorizes school boards to provide housing.

SLOWER SALES

The situation may be easing, as rising Florida mortgage rates cool housing markets locally. In June, the average price for an existing home in Naples fell 8 percent to $451,500, the Florida Association of Realtors reports. In the three months prior to that, prices topped $500,000.

The city was still Florida’s most expensive market, and demand by second-home buyers and affluent retirees probably will keep prices high, said Jo Carter, President of the Naples Area Board of Realtors.

Homebuilders have long been targeting affluent buyers, as Naples has the most private golf courses per capita of any U.S. city, according to the National Golf Foundation. The size of homes has increased 10 percent in the past decade and more than a third of homes are bigger than 3,000 square feet, according to county appraisals.

Some middle-income workers who bought homes more than five years ago are selling and taking their profits. Simone Gartner, 42, a paralegal who has lived in Naples 36 years, sold her duplex residence, which had doubled in value to $310,000, in 2004. She rented a condo and moved in with friends before relocating to Kernersville, N.C.

“I’m tired of the expensiveness. I cashed out at the right time.” said Gartner.