Home and Habitat

The Southwest Florida housing market has shifted, and if you’re thinking about selling, you had better hurry or put it off altogether if you bought after 2020, said Denny Grimes.

Grimes, president of Denny Grimes & Team at Keller Williams Realty, served as one of the three presenters at Market Trends of Southwest Florida.

About 1,300 people, most of them real estate professionals, gathered the evening of March 20 at Caloosa Sound Event Center in downtown Fort Myers, where they heard Justin Thibaut, president and CEO of LSI Companies, Grimes and Matt Simmons, managing partner and property appraiser at Maxwell, Hendry & Simmons, present key trends happening in land acquisitions and development, residential real estate and commercial real estate across the region.

The theme was “The Next Big Thing,” and for Grimes that meant describing how the housing market shifted from a seller’s to a buyer’s market.

“We’re actually now in a buyer’s market, and we’ve been in one since the fourth quarter of 2023,” Grimes said. “It kind of snuck up on us.

“We were praying for more inventory, and we have it right now. So, the market is resetting. And that’s the key to my message.”

Grimes called this good news for the area’s future.

“If housing keeps going up to where no one can afford it, who are you going to sell it to?” Grimes said.

Home sellers still have some positives in a buyer’s market — depending on when they bought the home. If they bought the home as recently as 2021, they may want to reconsider selling it — or sell it as soon as possible.

“The existing home sellers have a secret weapon that the builders can’t even compete with,” Grimes said. “It’s called equity. Naples has an average of 90% equity growth from 2019 to right now. If you owned prior to 2020, you’re sitting on a pile of cash. If you bought in 2021, 2022, you may not want to be selling right now. You may not like the outcome. The market has not risen to absorb what you paid for.”

Grimes used the sports analogy of the Kansas City Chiefs, who can’t always win the Super Bowl.

“I said it in 2021, it was the greatest market that could ever be,” Grimes said. “And it was fun for a while. Sellers who did not want to sell in 2007 watched their values fall 60%. And it took 15 years for the values to come back to where they were. I’m not predicting that. But sellers are going to be sorry if they don’t act soon versus later. People think it’s the hurricanes. It’s not the hurricanes. It’s not the cost of insurance. Our demand has not diminished. Our demand has diminished with our asking price. But the demand is still there. I may still want a Lamborghini, but I don’t like the price tag. But that doesn’t mean I don’t want it.”

Those land deals included $620-plus million for an active rock mine off Alico Road.

“With all the eye-popping transactions that have been happening in Southwest Florida, what are they? What do they mean?” Thibaut said. “Things like mines selling. Well, clearly, as we have a ton of infrastructure projects, roadways and whatnot coming on. That’s where our materials are coming from.”

Thibaut, like Grimes, expected housing costs to fall, including apartment rents.

“When it’s time to refinance, are we going to see lower sale prices?” Thibaut said. “Are we going to see people duking it out to fill these apartments and rents come down? That’s what we’re going to see in 2025.”

With the housing market falling, builders of new homes will be looking to cut their costs, too.

“It’s become very difficult to deliver what’s considered an affordable home,” Thibaut said. “Take Lehigh Acres, for example. Builders are trying to be just under $300,000 thousand dollars for a [three-bedroom, two-bath home]. You can’t do that without changing the product type.”

Thibaut pointed to Babcock Ranch, the region’s fastest-growing community, as an example.

“D.R. Horton’s using Bamcore product, which is a panelized product, which is a sustainable material,” Thibaut said. “Pulte’s using robotic assistance to lay concrete block out there. So, there’s a lot of innovative things going on at Babcock just like there always has been. But Babcock itself pulled 1,500 permits last year. They’ve delivered 6,000 homes already, and they’re still just a third of the way through with that development.”

“Over the past year, we’ve dealt with what’s a normal market,” Simmons said. “And it feels so strange, because we’ve had such an abnormal market with external influences for so long.”

Simmons spotlighted the recent sales of the former Sears building at the Edison Mall in Fort Myers.

Edison Florida Real Estate LLC bought the buildings at 4125 Cleveland Ave. on Nov. 18, paying $5.8 million for 147,847 combined square feet of space. Renovations to the building have yet to begin.

“Forty dollars a square foot gets you nothing in any asset class,” Simmons said of the price breakdown. “If a corner of Edison Mall is selling for $40 a square foot for the building, we’ve got to do something different. We should not have a corner piece of your mall on a major thoroughfare selling for that kind of price.

Edison Mall needs what a lot of other malls need. It needs rooftops, if possible, because it creates capture of demand for retailers. And it needs other uses that are evolving with the experience.”

Experiential retail would continue to thrive, Simmons said, meaning anything people are more apt to buy in person that they can’t find online.

Vibrant restaurants also will continue to trend, and few places have that down like south Cape Coral, he said.

“The real star, locally — Cape Coral is absolutely on fire,” Simmons said. “The redevelopment that is happening in Cape Coral, particularly in downtown Cape Coral, in and around Cape Coral Parkway, it’s shocking. We are a long way past having to give away homes on the ‘Price is Right’ in the early 1960s.”

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