I am a member of my local Real Estate Investors Association (REIA) and attend the monthly meetings regularly and the monthly luncheons when time permits. I enjoy the discussion and hearing from investors that are working in the market everyday to hear their perspective. The REIA I am a member has a fee associated, but is focused solely on discussing business and there are no sales pitches or peddling of any products which is nice.
The last general meeting we had was on June 21st and the topic was a review of the local market in Southwest Florida (SWFL). Before diving into our local numbers, Jeff Tumbarello a founder and director of the SWFL REIA recapped the trends in other areas of debt. We looked at the trends in auto debt, consumer credit card debt, government debt, etc. essentially every debt category has risen above the highs of 2005 except… mortgage debt which is close but still below the highs over a decade ago. Essentially looking at the fact that we are in a very high debt ridden time period one of the overall healthiest (solely on this metric) is the housing market.
There are obviously worries for concerns globally as well looking at the mess in the Euro Zone, debt levels in China, and continued conflict in the Middle East. The United States, relatively speaking, is in a better place to weather any global financial storm that is sure to come in the near to distant future. We know that our global economy is cyclical and at some point something will give. That being said the US still being the world’s reserve currency is in a great spot relatively speaking.
Back to local market and real estate… essentially the foreclosures have dropped dramatically and flattened out to very low numbers in Lee and Collier (southwestern Florida counties). A high number of purchases are done in all cash – around 45% in Lee & Collier County which is well above the national average of 15%. Our market is pretty steady in terms of its gradual growth. There are a lot of market factors to consider as we have more retirees moving down and some companies trying to recruit and bring younger people to the area. There is steady growth currently in new construction of both residential homes and apartment complexes. The issue is the homes are priced $250k+ pricing out a big portion of the population.
Affordable housing is a big topic in almost every city which is nothing new, but it is a concern and likely the reason there is such a high rental population in SWFL for permanent residents. Regardless of my commentary the market seems to be chugging along here in Lee & Collier County (Fort Myers, Cape Coral, Estero, Bonita Springs, & Naples) for retirees, residents, and investors. That being said it is difficult to find deals as an investor in the current market and you have to work harder in a more competitive market like our current one.