The stars are aligning for pent-up demand to rejuvenate Southwest Florida’s home-building market, Randy Thibaut of Land Solutions told the Lee Building Industry Association’s second annual Market Trends symposium Thursday night.
Still, he said, even with an expected 4,000 single-family-home permits pulled by the end of the year in Lee, Collier and Charlotte counties, “We’ve got a ways to go. We’re not out of the woods yet.”
But a steady recovery to a sustainable level of about 10,000 houses a year is possible as various factors kick into gear to stimulate demand, Thibaut said.
For one thing, he said, the price of new construction is getting back to being competitive with existing homes in price for the first time since the 2006 real estate price implosion left a glut of inexpensive houses on the market.
Also, Thibaut said, some people who lost their homes are getting back the ability to buy with a Federal Housing Administration-backed loan.
Under FHA rules, someone who loses his house in foreclosure can get a new loan three years later, he said. “Now they have an opportunity to buy a new home.”
Thibaut also said new and old players alike are positioning themselves for a comeback of the residential real estate business in Southwest Florida.
After construction slowed to a crawl three years ago, he said, “Things have dramatically changed. Large land developers from all over the world have their sights laser focused on this market. It’s nice to be wanted again.”
As the recovery takes shape, Thibaut said, anyone looking to participate will face a fundamentally different landscape than the one prevailing just a few years ago when houses and land alike were available at fire sale prices.
Now, he said, the major builders “basically have bought up all the distressed properties at distressed property prices. They’ve got that in their hip pockets. The new builders are going to have to pay retail.”
But those who stuck around or got in at the bottom have a bright future, Thibaut said: “Those of us in this room, we made it. We didn’t let it get the best of us. Some of our friends didn’t.”
Thibaut, who specializes in brokering large property sales, made his case on the numbers: notably a wave of major land purchases recently by builders including $3 million for the 240-acre Paradise Preserve project in North Fort Myers (the old Lochmoor Country Club) by Bradenburg Properties of Florida in March.
Carl Barraco, president of Barraco and Associates, a civil engineering firm in Fort Myers, said Thibaut presented the situation accurately without shying away from the danger of over-exuberance. “It’s a great sign of what direction the market’s going in.”
Thibaut said it’s possible that the three counties could see a total of 5,000 single-family-home permits, up from about 4,000 this year.
But he warned against the wild over-building of 2005, when 45,000 permits were pulled and said that ideally, the area will be able to reach and maintain about 10,000 a year.
“Don’t kill the golden goose,” Thibaut said. “It hasn’t even laid the golden egg yet.”
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