Southwest Florida Housing Market: The Investigative Report

The average price of a home in Southwest Florida has dropped between $20,000 and $65,000 over the last year. The drastic change has sellers sweating, and buyers waiting for the bottom, but when will that happen?

NBC2 investigators have exclusive information about what must happen for the market to turn around.

On a Friday morning in Fort Myers, a realty firm and auction company teamed up and unloaded once hot Cape Coral lots for half their appraised value.

“We promise our sellers to bring them buyers and we’re not getting them the results. Not only us but pretty much most of the local realtors we’re seeing the same thing. We’ve got to start thinking out of the box,” said Florida mortgage broker Jeff Miloff.

Southwest Florida’s real estate market is knee deep in a price correction because of investors.

“People didn’t go in and buy a home. They went in and bought a half dozen,” said Denny Grimes of Denny Grimes and Company.

How flooded is the market?

In Charlotte County there are almost 6,000 homes for sale. In Collier County, 11,000 homes are for sale. In the Lee County housing market there are $14,000 homes on the market.

“There are a lot of lookers and they have a lot to choose from so they can be very particular,” said Maureen Coan, a Colonial Country Club resident.

There are 112 units available in Colonial Country Club alone.

“They’ve got sellers that are willing to jump through hoops because generally speaking sellers fear tomorrow is worse than today,” said Grimes.

Will tomorrow be worse? NBC2 discovered it depends on what you own.

“The single family market is beginning to make its way back,” said Dr. Wayne Archer of the University of Florida.

Archer conducts quarterly surveys on Florida real estate. His latest study won’t be released until next month, but he shared it with us. Based on the opinions of more than 300 real estate professionals, he believes single family homes have reached bottom. Florida mortgage loan applicants should jump on them … NOW!

“I don’t think we are going to see prices declining really on the main. There are a few cities where we’ve seen a turn down in recent months. I don’t think that’s going to keep going down,” said Archer.

Archer’s survey is not as optimistic about Florida condos, expecting the worst is still yet to come.

“Condos have always been an extremely volatile market. They seem to be, that’s the market that drives in amateur investors and speculators,” said Archer.

If you’re a buyer, when do you step in for bargains?

“If you’re an end user, it’s a buyers market. As an investor it’s still, there’s still time. The correction is still going on. I need to see a greater stabilization in the market before I would enter the market on the buying side,” said Phil McCabe, owner of Inn on Fifth and McCabe’s Irish Pub.

While McCabe can afford to guess, Grimes says if you can’t afford to, don’t try. You should think of the bottom of the market as a window of opportunity, not a point a time. In other words: Florida mortgage borrowers should take advantage of this before it’s too late.

“Unless you’re a professional guesser and you can consistently get 4 or 5 numbers of 6 for a lottery ticket, don’t try to guess the bottom of the market because you won’t be able to do it,” said Grimes.

All of our experts agree both commercial and residential rental markets are extremely strong right now. They expect the rest of the market will catch up over the next few years.

Legislation to ease insurance rates and property taxes is expected to he