“Southwest Florida is the darling of Florida right now” according to one local real estate expert recently interviewed by FOX4. Beach markets are in high demand, with people moving from the East Coast. Prices of new homes are high, so many buyers are purchasing a resale home and fixing it up to add value.
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 2022.
>>Explore Roofstock's Southwest Florida investment properties here.
Population growth
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 10 years the population has grown by 16.25%.
- 2 Southwest Florida counties, Lee and Polk, are leading the way nationally in population growth.
- Lee County is the most populated of the five counties in Southwest Florida and home to nearly 761,000 residents.
- Collier County has 375,752 residents, Charlotte County has 186,847, Hendry has a population of 39,619, and Glades County is home to 12,126 people.
Job market
Cape Coral, Lehigh Acres, and Fort Myers in Southwest Florida have been listed among the biggest “boomtowns” in the nation, based on their strong population growth and number of local businesses.
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 over $34.5 billion and has grown by about 60% 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.
- Unemployment rate in the region is 2.2%.
- Collier and Lee, the 2 largest counties in Southwest Florida, boast job growth of 6.2% and 4.6% year-over-year.
- Median household income in Cape Coral-Fort Myers is $62,240 and has grown by 10.9% 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.
- Southwest Florida job creation is strong, with industry sectors such as leisure and hospitality, professional and business services, and trade and transportation showing the most robust growth.
- 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, sales volume of single-family homes has increased by 16.9% while median sales prices are up by 24.6%.
Southwest Florida is seeing a housing construction boom, as developers strive to keep up with demand. In fact, Cape Coral and Fort Myers are seeing the 2nd largest increase in single-family home construction in the country, an indication of just how strong the real estate market is in Southwest Florida cities.
Key Market Stats:
For the three largest counties in Southwest Florida – Lee County, Collier County, and Charlotte County – according to Realtor.com and the most recent statistics from Zillow (as of April 2022).
Lee County
- Biggest cities: Fort Myers, Cape Coral, Lehigh Acres
- Zillow Home Value Index: $404,770
- Annual home value increase: 47.7%
- Median listing price: $435,000
- Median selling price: $410,000
- Median list price per square foot: $261 per square foot
- Days on market (median): 49
- Sale-to-list price ratio: 100%
- Of the 40 cities in Lee County, Sanibel Island is the most expensive with a median listing price of $1.4 million and Villas is the most affordable city with a median listing price of $235,000.
Collier County
- Biggest cities: Naples, North Naples, Marco Island
- Zillow Home Value Index: $590,729
- Annual home value increase: 51.1%
- Median listing price: $725,000
- Median selling price: $650,000
- Median list price per square foot: $401 per square foot
- Days on market (median): 56
- Sales-to-list price ratio: 100%
- Of the 24 cities in Collier County, Pine Ridge is the most expensive with a median listing price of $2.6 million, while Immokalee is the most affordable city with a median listing price of $234,500.
Charlotte County
- Biggest cities: Punta Gorda, Port Charlotte, Boca Grande
- Zillow Home Value Index: $385,255
- Annual home value increase: 45.5%
- Median listing price: $409,900
- Median selling price: $399,000
- Median list price per square foot: $245 per square foot
- Days on market (median): 46
- Sale-to-list price ratio: 98.66%
- Of the 12 cities in Charlotte County, Grove City is the most expensive with a median listing price of $799,000 and Charlotte Harbor is the most affordable city with a median listing price of $207,200.
Attractive renters’ market
The thriving real estate market is also helping to drive the demand for rental property in Southwest Florida. Houses that used to be rentals are getting bought up, causing rental prices to jump, sometimes by hundreds of dollars per month.
There are 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.
- Relocating for the career opportunities found in Southwest Florida.
Key Market Stats:
For the three largest counties in Southwest Florida according to Zumper for Fort Myers, Naples, and Port Charlotte (as of June 2022).
Lee County (Fort Myers)
- Median rent 3-bedroom home: $2,600 per month
- Annual rent increase: 34%
- Percentage of renter households: 44%
- Most affordable neighborhoods are Brookhill, Olympia Point, and Winkler Safe Neighborhood where rents range between $1,195 to $1,275 per month.
- Most expensive neighborhoods are Colonial County Club, Paseo, and Pelican Preserve where average rents go for $3,000 to $5,050 per month.
Collier County (Naples)
- Median rent 3-bedroom home: $3,275 per month
- Annual rent increase: -22%
- Percentage of renter households: 15%
- Most affordable neighborhoods are Lake Park, Coquina Sands, and Moorings where rents range between $2,300 and $4,500 per month.
- Most expensive neighborhoods are Aqualane Shores, Park Shore, and Old Naples where rents can go as high as $18,000 per month.
Charlotte County (Port Charlotte)
- Median rent 3-bedroom home: $2,500 per month
- Annual rent increase: 39%
- Percentage of renter households: 23%
- Rent range: 98% of units have rents ranging between $1,000 and $5,800 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 seasonally adjusted historic changes in home prices (including purchases and refinance mortgages) for Southwest Florida:
Lee County (Cape Coral MSA)
- April 2017 HPI: 185.75
- April 2022 HPI: 358.74
- 5-year change in home prices: 93.1%
- 1-year change in home prices: 42.2%
- Monthly change in home prices: 3.1%
Collier County (Naples – Marco Island MSA)
- April 2017 HPI: 197.83
- April 2022 HPI: 378.32
- 5-year change in home prices: 91.2%
- 1-year change in home prices: 44.7%
- Monthly change in home prices: 3.4%
Charlotte County (Punta Gorda MSA)
- April 2017 HPI: 177.32
- April 2022 HPI: 364.03
- 5-year change in home prices: 105.3%
- 1-year change in home prices: 46.0%
- Monthly change in home prices: 3.6%
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, 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): HAI 120
- Collier County (Naples – Immokalee - Marco Island MSA): HAI 110
- Charlotte County (Punta Gorda MSA): HAI 114
Quality of life
U.S. News & World Report ranks Fort Myers – the largest city in Southwest Florida – as the 7th best place to retire and 100th 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.
- 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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