Expect Housing Prices to Fall in Collier County, Lee County
The Collier County housing market is first - and Lee County is number-six - on a nationwide list of housing markets where prices are most likely to fall during the next two years.
Local Florida real estate experts said the trend is down here — but expect a lot of variation in how different communities and types of homes do as overall prices unwind.
PMI Mortgage Insurance of Walnut Creek, Calif., announced the findings Tuesday in its Summer 2007 U.S. Market Risk Index.
“I’d probably agree” that prices are headed down in Lee County, said Joe Cameratta, CEO of Cleveland-based Cameratta Properties, which built High Point Place condominiums in downtown Fort Myers and is building the First Street Village residential/commercial project nearby.
But, Cameratta said, “It’s hard to take all the projects in Fort Myers and say, ‘Everything’s going to fall in Fort Myers.’ We’ve increased our prices twice in the last six months at First Street Village.”
Ross McIntosh, a Naples-based Florida mortgage broker, said prices are headed down in Collier but that he’s not sure the situation is as dire as the PMI report indicates: “Are Naples’ results going to be worse than anybody else? I doubt it.”
He noted that in Lee and Collier, there’s evidence that prices have already taken a tumble, but the situation varies depending on whether there’s an oversupply of property and undersupply of Florida mortgage borrowers.
“How many big houses on the Gulf are there? If you want one, you don’t have many choices. How many garden condominiums are there? You have a lot of choices.”
LaVaughn Henry, director of economic analysis for PMI, said the forecast is based largely on how sharp past price swings have been in a particular Florida housing market: “Florida’s had a high probability assigned to it because historically it’s had a high price volatility. What goes up will, at some point, come down.”
The index shows a shift in risk toward Florida and California, as well as certain areas of the Southwest.
Lee County’s housing market is a shadow of what it was in the boom years of 2004 and 2005.
Since December 2005, when the median price of an existing-single-family-home resale reached an all-time high of $322,300 according to the Florida Association of Realtors, both the number of sales and the pace of construction have dropped sharply.
The median price was $283,200 in April, off 12 percent from the peak. Meanwhile, the number of single-family permits pulled by developers countywide fell from 1,422 in December 2005 to 424 in May, down 70 percent from December 2005.
John McIlwain, senior resident fellow for housing at the nonprofit, Washington-based Urban Land Institute, said prices will do poorly in areas where there’s a lot of unsold homes still on the market. There’s an unsold inventory of about 15,000 homes in Lee County, about four times what it was a year ago.
Another thing working against Southwest Florida is that while there’s a strong employment market, it’s mainly low-paying jobs in retail or services industries that don’t pay enough to buy most houses, he said.
