Just like the Floridian summer, the real estate activity in Southwestern Florida is heating up. Though this region has been generally strong for years, it seems to be getting a boost from trends triggered by the coronavirus pandemic, which is altering buyer behaviors and causing them to lean toward the spacious surroundings and outdoor lifestyle that cities such as Naples, Fort Myers and Cape Coral have to offer.
According to realtor.com®, Sarasota and Collier counties each reported sizeable year-over-year increases in median list prices —5.8 percent and 5.1 percent, respectively—in June, compared to a 5.9 percent drop in Broward County to the east.
Several real estate leaders in the Sunshine State have weighed in on this trend and all agree the market is surging in the region—even as the number of COVID-19 cases increase.
“The Southwest Florida market has resilience, growth and stability,” says Phil Wood, president of Naples-based John R. Wood Properties.
Although buyer activity was temporarily impacted due to travel restrictions and shut-downs, buyers have since returned in full force. This continues the positive trajectory that, even after several years of steady growth, was increasing its pace in January and February, prior to the shutdowns. As an example, June and July have been very above average with the level of sales.
Data from Florida REALTORS® shows single-family closings were up month-over-month in June in Lee County (1,241 compared to 924 in May). While YoY sales were down 1.3 percent for single-family and 12.8 percent for townhouses and condos, this is typical of a summer market.
“Where we see the most demand is in the below-$500,000 single-family home market, where we are seeing less than one month of inventory,” says Christina Pappas, vice president of The Keyes Family of Companies.
Michael Saunders, founder and CEO of Michael Saunders & Company, agreed that the temporary slowdown brought on by the initial spread of the virus in early spring has since subsided.
“First quarter 2020, closing and pending sales exceeded 2019. By mid-March through the first two weeks of May, we saw the drastic effects of COVID panic with a 50 percent-plus drop in new listings and pendings,” Saunders says. “By mid-May, a robust buying frenzy began to take hold. We are continuing to experience a red-hot market with limited inventory.”
Rei Mesa, president and CEO of Berkshire Hathaway HomeServices Florida Realty, oversees agents across most of the state, and he’s seen no letup in buyers. Most of them, he says are moving from the Northern U.S. following the traditional Floridian migration pattern of Northeasterners going to the East Coast and Midwesterners going to the West Coast. The difference now, Mesa notes, is that people are coming in greater droves to Southwestern Florida because there is so much more land available there for new construction.
Between the space and the beautiful weather—as well as Florida’s low state income tax and interest rates—Mesa says people are being attracted to the environment.
“We are seeing a desire for buyers out of state looking for less density and more space,” Mesa says. “We’re even seeing Floridians who want to upgrade for more space and less density.”
Pappas is seeing a similar trend, stating the increased buyer demand from the Northeast is due to changes in the SALT tax reform since COVID.
The other recent catalyst for this trend is the explosion of remote working, Mesa adds. As people realize they can continue their careers from their homes, he says that moving to a lifestyle-rich market like Southwestern Florida has become a popular option. The influx has been reported by other major brokerages in the region as well.
“Our buyers are mostly coming from big city areas—Chicago, New York, Boston, Miami, etc. Beginning in May, we’ve been seeing a lot of buyers from those areas, looking to get out of COVID hotspots,” Wood says. “Many have now realized that they can work remotely, so they no longer have to deal with commuting and all the other big-city challenges. They are looking to move to paradise sooner than later.”
According to Wood, the new Southwestern Floridians are coming for all types of price ranges, up into the $10 million range for the prime spots on the beach or with golf course views.
Saunders says they are searching for communities with easy access to outdoor space, small-city living with big-city cultural offerings, as well as good medical care and good school options.
“Our part of Florida offers a casual but sophisticated lifestyle with an overall community that embraces wellness and outdoor living—biking and walking trails, easy access to water and beach,” says Saunders. “In terms of features of single-family homes and condominiums, many offer gracious space for gathering indoors, home offices which are gaining in importance in everyone’s life, and outdoor terraces, balconies and swimming pools to enjoy the year-round warm climate. We have it all—and it is eagerly being embraced as evidenced in buying activity.”
Pappas says, “If you are going to be pent up inside your home, it might as well be in a warm environment with a backyard and a pool! As people are able to work virtually, they are taking advantage of living where they want to live.”
Andrew King is a contributing editor to RISMedia.