Vacant Homes Rampant in Lee County

Last year, Jonathan Kline, a 38-year-old Maryland resident and financial consultant, discovered the Southwest Florida housing market.

Like thousands of other houses across fast-growing Lee County, the homes Kline bought now sit vacant while he tries to sell them.

“I bought these houses, but I sure as heck didn’t do my homework,” Kline said. “They never told me how bad it could get.”

New houses have been flooding the Lee County market — thousands empty as the real estate business continues its dive — according to data released this week by the U.S. Census Bureau.

“Housing units built does not mean housing units occupied,” said Michael Polly of Denny Grimes & Company, a Fort Myers real estate brokerage.

Lee County was fourth in the nation with 9 percent growth in the number of housing units added from 2005 to 2006, according to the Census data.

In one year, 28,393 housing units — which include single-family houses, apartments, condos and any other form of housing — were added.

Since 2000, the county has added 95,000 housing units.

But thousands of them are empty.

The vacancy rate for Lee County increased 20 percent to 92,989 units in 2006. The majority of those, 57,208, are seasonal living units.

The number of vacant houses for sale has more than doubled to 9,723.

Kline’s houses have been vacant for five months. Although one should be sold soon, he said he’s still going to lose almost $250,000.

“That’s a pretty crushing blow. It’s a heck of a lesson,” he said. “I shouldn’t have been speculating in an arena I had no knowledge of.”

The building boom between 2004 and 2006 saw different kinds of buyers.

“We didn’t have end users. We had speculators and builders,” said Brett Ellis, a Realtor for Ellis Team at RE/MAX Realty. “Sometimes we had flippers selling to the next flipper.”

Speculators bought houses and immediately resold them for a higher price, pushing Florida mortgage costs ever skyward.

About 35 percent of the houses on the market were built in 2005 or more recently. Rental units and vacant seasonal housing are up 14 percent.

Although fewer people are filling out Florida mortgage applicants and getting building permits in the county, that slowdown is recent.

Since 2006, almost 19,000 units have been added to the property tax rolls.

Residences being completed now were issued permits 18-24 months ago, meaning the recent slowdown in permits won’t be seen until almost two years from now.

The significant recent drop in the Southwest Florida real estate market also is affecting homeowners who are trying to sell.

“If nothing else came in the market, it would take 27 months to sell,” one agent said said. “It’s the most I’ve ever seen.”

Median rent and Florida mortgage rates continued to increase from 2005 to 2006, although housing industry experts see rates falling this year.

• In 2006, the median Florida mortgage in Lee County was $1,502, an increase of almost 20 percent from 2005.
• The median rental rate was $965, up 11 percent from 2005 and 75 percent from 2000’s median rental rates of $554.
• The median value of houses in the county grew 21 percent in one year to $270,100 in 2006.
• That’s almost triple the median value of $96,700 in 2000.

But the prices are falling now. In the next six to nine months, “you’ll see a rapid decline in the prices of housing in Southwest Florida,” Ellis said.

That’s good news to buyers and to renters as owners also discount rents to get a house or apartment filled.

“Only half of the market is sad,” he said, referring to sellers.

SOURCE: The News-Press