Median sales prices for single-family homes in Southwest Florida cities such as Cape Coral, Fort Myers, and Naples have increased by double digits, according to Florida Realtors.
In fact, the economy and housing market in Southwest Florida are witnessing the same robust activity that’s engulfing the entire state. Population and jobs are growing, municipalities are business friendly, and there’s more demand than supply in the real estate market. These are exactly the things that rental property investors love to see.
Southwest Florida is located along the “west coast” of Florida. The region borders the Gulf of Mexico, with Tampa Bay to the north and the Everglades to the east. The region is known for its white sandy beaches, tropical landscape, and winter resort havens.
The Southwest Florida Economic Development Alliance (SWFLEDA) notes that all five counties that make up Southwest Florida – Lee, Collier, Charlotte, Glades, and Hendry – are experiencing strong growth. The largest cities in Southwest Florida include Fort Myers, Cape Coral, Naples, East Naples, and Port Charlotte.
Keep reading to learn why the Southwest Florida real estate market is worth considering in 2021.
The Economic Development Alliance notes that Southwest Florida is among the fastest growing regions in the state and projections show the area’s strong growth trend should continue. Lee County is the fastest-growing county in Southwest Florida, but even smaller counties like Glades and Hendry have seen positive growth over the last 10 years.
Key Population Stats:
- Population of Southwest Florida is about 1.3 million.
- Over the past year the population has grown by 2.08%.
- By 2025 the region is expected to grow to 1.5 million, with the population reaching at least 1.8 million residents by 2045.
- Median age is 49.3 years.
- 71% of people living in Southwest Florida are below the age of 65 and 51% are in the typical working years of 20 to 65.
- Lee County is the most populated of the five counties in Southwest Florida and home to more than 754,000 residents.
- Collier County has 372,880 residents, Charlotte County has 182,033, Hendry has a population of 40,347, and Glades County is home to 13,754 people.
The Walton Sun recently reported that Cape Coral, Lehigh Acres, and Fort Myers in Southwest Florida made the list of the biggest “boomtowns” in the nation.
The region is business-friendly and provides a high quality of life that’s easy on the pocketbook. Government, community, and business leaders in Southwest Florida work hand in hand to create a vibrant economy focused on creating high-wage jobs.
Key Employment Stats:
- GDP of Southwest Florida (Cape Coral-Fort Myers MSA) is nearly $32.7 billion and has grown by about 56% over the last 10 years.
- Job growth in the construction, professional and business services, and education and health services sectors remains strong, according to the BLS.
- Cape Coral in Southwest Florida was recently ranked by Forbes as the 3rd-best place for jobs in the U.S.
- Unemployment rate in the region is 5.5%.
- Labor force in Southwest Florida is nearly 610,000 employees.
- Median household income is $56,129 and has grown by 4.08% over the past year.
- Key industry sectors in Southwest Florida include cleantech and emerging technologies, manufacturing, life sciences, defense and homeland security, logistics and distribution, aviation and aerospace, and financial and professional services.
- Job creation in Southwest Florida is strong, with recent job openings for nearly 900 high-skill, high-wage STEM jobs (science, technology, engineering, mathematics) while employers in Fort Myers had nearly 2,000 STEM job openings they were trying to fill.
- Construction was the highest job growth sector in Southwest Florida last year.
- Major employers in Southwest Florida include Lee Health, Lee County School District, Publix Super Market, NCH Healthcare System, Walmart, Florida Gulf Coast University, US Sugar, Hertz, and the City of Fort Myers.
- Companies with corporate headquarters in Southwest Florida include The Hertz Corporation, Hertz Equipment Rental Corporation, Chico’s FAS, and medical device developer Arthrex, Inc.
- Florida Gulf Coast University, Florida Southwestern State College, Hodges University, Rasmussen College, and Southwest Florida College are some of the largest colleges and universities in the region.
- Most common concentrations for a bachelor's degree are general business administration and management, resort management, and speech communication and rhetoric.
- Interstate highway I-75 connects Southwest Florida to Tampa to the north and Greater Miami to the east.
- Port Manatee is one of Florida’s fastest growing cargo seaports and Seminole Gulf Railway provides freight rail service throughout the region.
- Southwest Florida region is served by five commercial airports: Tampa International, Southwest Florida International in Fort Myers, Sarasota-Bradenton International, St. Petersburg-Clearwater International, and Punta Gorda Airport.
Real Estate Market
Fort Myers, Cape Coral, and Lehigh Acres in Lee County are among the biggest cities in Southwest Florida where the real estate market is thriving. According to Florida Realtors, single-family home sales are up nearly 27% across the entire state, while median sales prices are up by 15.6%.
A shortage of homes is one reason why the demand for housing in Southwest Florida is so strong. As the Naples Daily News reports, builders and home developers in Southwest FL have taken a cautious approach and put many new home developments on hold. As a result, the demand for existing single-family homes has risen, creating seller’s markets in all three counties.
Key Market Stats:
- Biggest cities: Fort Myers, Cape Coral, Lehigh Acres
- Zillow Home Value Index: $249,222
- Annual home value increase: 4.8%
- Projected annual increase: 7.3%
- Median listing price: $220,000
- Median selling price: $217,000
- Median list price per square foot: $167 per square foot
- Days on market (median): 84
- Sale-to-list price ratio: 97.27%
- Of the 41 cities in Lee County, Sanibel Island is the most expensive with a median listing price of $749,000 and Lehigh Acres is the most affordable city with a median listing price of $15,000.
- Biggest cities: Naples, North Naples, Marco Island
- Zillow Home Value Index: $360,487
- Annual home value increase: 5.1%
- Projected annual increase: 8.1%
- Median listing price: $433,300
- Median selling price: $400,000
- Median list price per square foot: $245 per square foot
- Days on market (median): 92
- Sales-to-list price ratio: 96.65%
- Of the 22 cities in Collier County, Pelican Bay is the most expensive with a median listing price of $1.2 million, while Everglades is the most affordable city with a median listing price of $129,000.
- Biggest cities: Punta Gorda, Port Charlotte, Boca Grande
- Zillow Home Value Index: $233,659
- Annual home value increase: 6.1%
- Projected annual increase: 7.5%
- Median listing price: $129,000
- Median selling price: $159,000
- Median list price per square foot: $155 per square foot
- Days on market (median): 85
- Sale-to-list price ratio: 96.66%
- Of the 12 cities in Charlotte County, Manasota Key is the most expensive with a median listing price of $439,900 and Rotonda West is the most affordable city with a median listing price of $57,400.
- Price reduction during listing period: 20% of homes listed
Attractive Renters’ Market
The thriving real estate market is also helping to drive the demand for rental property in Southwest Florida. The communications director of CareerSource Southwest Florida, a company that matches local job seekers with employers, gave the Walton Sun a variety of reasons why so many people are coming to the region:
- College towns such as Cape Coral and Lehigh Acres are attractive to students looking for affordable housing
- White-collar workers are coming back to the area to be closer to their aging parents
- Younger generation is relocating for the career opportunities found in Southwest Florida
Key Market Stats:
Lee County (Fort Myers)
- Average rent: $1,304 per month
- Annual rent increase: 2%
- Percentage of renter households: 43%
- Rent range: 70% of units have rents ranging from $1,001 to $1,500 per month
Collier County (Naples)
- Median rent: $1,549 per month
- Annual rent increase: 3%
- Percentage of renter households: 40%
- Rent range: 56% of units have rents ranging from $1,001 to $1,500 per month
Charlotte County (Port Charlotte)
- Median rent: $1,299 per month
- Annual rent increase: 6%
- Percentage of renter households: 39%
- Rent range: 82% of units have rents ranging higher than $1,001 per month
Historic Price Changes & Housing Affordability
When forecasting the demand for rental property in a given market, real estate investors review price change trends and the affordability of housing in the area. Two information resources that can be found online are the Freddie Mac House Price Index (FMHPI) and the NAR’s housing affordability report.
Based on data from Freddie’s most recent FMHPI report, these are the historic changes in home prices (including purchases and refinance mortgages) for Southwest Florida:
Lee County (Cape Coral MSA)
- October 2015 HPI: 166.81
- October 2020 HPI: 223.13
- 5-year change in home prices: 33.8%
- 1-year change in home prices: 8.5%
- Monthly change in home prices: 1.3%
Collier County (Naples – Marco Island MSA)
- October 2015 HPI: 183.47
- October 2020 HPI: 230.64
- 5-year change in home prices: 25.7%
- 1-year change in home prices: 6.5%
- Monthly change in home prices: 1.1%
Charlotte County (Punta Gorda MSA)
- October 2015 HPI: 154.43
- October 2020 HPI: 218.99
- 5-year change in home prices: 41.8%
- 1-year change in home prices: 9.1%
- Monthly change in home prices: 1.4
The Housing Affordability Index (HAI) from the National Association of Realtors measures whether or not a typical family could qualify for a mortgage on a median-priced existing (resale) single-family home in the market.
An HAI value of 100 means the family has exactly enough median income to qualify (assuming a 20% down payment).
For example, if an HAI is 130 the typical family has 130% of the median family income needed to qualify for a conventional loan for a single-family home. On the other hand, if the HAI in a market is 90%, it means that the typical family only has 90% of the median family income needed to qualify for a loan.
In all three of the Southwest Florida counties below, the HAI has decreased year-over-year. That means it is becoming more expensive for the typical family to qualify for a mortgage on a median priced resale single-family home in the market.
Lee County (Cape Coral – Fort Myers MSA)
- 2017 HAI: 143.8
- 2018 HAI: 134.0
- Change 2017 vs. 2018: -8.2%
Collier County (Naples – Immokalee - Marco Island MSA)
- 2017 HAI: 96.4
- 2018 HAI: 90.5
- Change 2017 vs. 2018: -2.5%
Charlotte County (Punta Gorda MSA)
- 2017 HAI: 158.5
- 2018 HAI: 143.0
- Change 2017 vs. 2018: -1.1%
U.S. News & World Report ranks Fort Myers – the largest city in Southwest Florida – as the 2nd best place to retire and 58th best place to live in the U.S. The city has retained its small-town charm over the last century, while just a few miles away Cape Coral and Sanibel Island are perfect for boaters, sailors, and fishing.
Key Quality of Life Stats:
- Southwest Florida is known for its tropical climate, water, wildlife, and an ecosystem of preserves, sanctuaries, swamps and estuaries.
- Major cities include Naples, Fort Myers, Cape Coral, Punta Gorda, and Marco Island.
- Age of the population is diverse, with 20% of the residents 19 years or younger and 33% aged 60 or older.
- World-class theme parks of Orlando are about a three-hour drive from Fort Myers.
- Everglades National Park, Edison Ford Winter Estates, and the Babcock Wilderness Preserve are all in Southwest Florida.
- Lee Memorial Hospital, NCH Baker Hospital Downtown, and Gulf Coast Medical Center are ranked among the three best hospitals in Florida.
- Southwest Florida has more than 150 golf courses and is nicknamed the “Golfing Capital of the World”.
- Boston Red Sox, Minnesota Twins, and the Tampa Bay Rangers all hold spring training in Southwestern Florida.
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