The 2019 market outlook for Lee County was presented by Jeff Tumbarello, Broker of Steelbridge Realty at the South West Florida Real Estate Investment Association general meeting in January 2019.
About the presentation:
- Data from MLS (exported 1/14/2019 9:26 AM) and public records.
- Trended with Microsoft Excel.
- Unless otherwise stated, charts contain all Residential assets.
- The information was prepared for the use of Steelbridge Realty and shared at the meeting.
Click here for the slides presented at the meeting 2019 Market Outlook for Lee County
2019 Market Outlook for Lee County: What happened in 2018?
December 2018 statistically was a very bad month, 2018 statistically was a great year in spite of that.
Let’s talk about the December 2018.
- In my opinion, the stock market correcting was a few things:
- Wall Street traders are/were reallocating for a cyclical bear market.
- They did this because of Fed Bank rate hikes.
- When the prime lending rate breaks 5.5%, we generally have a recession in 9 to 18 months.
- Our leverage structure as a result of the aftermath of 2008 is different than in previous cycles.
- High-Frequency trading went wild as a result.
- The Plunge Protection Team Gone got involved.
2019 Market Outlook for Lee County: Year over year metrics 2017 versus 2018
|
2017 |
2018 |
% Difference |
|
|
Sales Volume |
$5,584,071,334 | $6,164,000,697 | 10.39% |
| Sales Counts | 19,453 | 20,649 |
6.15% |
|
Average Price |
$287,055 | $298,513 |
3.99% |
| Median Price | $219,998 | $227,900 |
3.59% |
2019 Market Outlook for Lee County: Year over year metrics
December 2017 versus December 2018
| 2017 | 2018 |
% Difference |
|
|
Volume |
$449,669,822 | $415,682,106 | -7.56% |
| Counts | 1,650 | 1,336 |
-19.03% |
|
Average |
$272,527 | $311,139 | 14.17% |
| Median | $218,000 | $230,000 |
5.50% |
The drop in sales volume and sales counts is troubling. From media reports (we need to be skeptical of anything reported that has not been verified) this was a National “thing”.
2019 Market Outlook for Lee County: Sales by Year Built
There is a seesaw going on in the market between resales and new construction. Right now new construction is offering a quality product at a slightly higher price. From our experience, the consumer is recognizing the value and will to pay that premium.
This Chart shows December 2018 versus December 2018.
Notice how the reduction in sales counts was across the board of all the years built, this indicates a market issue not an asset class issue.
2019 Market Outlook for Lee County: Sales Count Patterns
Almost every December shows a higher sales count in December versus November. That did not happen in December of 2018.
2019 Market Outlook for Lee County: Bubbles of sales activity by price
The bubbles of sales activity by price showed the market is essentially the same year over year with the difference in price. This is essentially inflation. Below, is the chart for December 2017 versus December 2018.
The difference in the bubbles of activity by price in December 2017 versus December 2018 is apparent. It is also across the board.
2019 Market Outlook for Lee County: Metrics by the City
This is the entire year versus the entire year.
| By City | % Difference
Year Over Year |
% Difference Year Over Year |
|
|
Sales Volume |
Counts |
Average Price |
|
|
St. James City |
19.76% | 19.35% |
0.34% |
|
Sanibel |
23.66% | 15.09% | 7.44% |
| Punta Gorda | 18.51% | 14.29% |
3.70% |
|
North Fort Myers |
10.61% | 9.74% | 0.79% |
| Miromar Lakes | 20.27% | 22.54% |
-1.85% |
|
Lehigh Acres |
9.81% | 0.47% | 9.29% |
| Fort Myers Beach | 3.98% | 7.53% |
-3.30% |
|
Fort Myers |
11.33% | 7.05% | 3.99% |
| Estero | 14.89% | 12.25% |
2.35% |
|
Captiva |
8.01% | -14.10% | 25.75% |
|
Cape Coral |
7.28% | 3.71% |
3.44% |
|
Bonita Springs |
4.40% | 5.52% | -1.06% |
| Bokeelia | 1.84% | -0.89% |
2.76% |
|
Alva |
37.11% | 28.03% |
7.09% |
Here is December 2017 versus December 2018.
| December vs December | % Difference
Year Over Year |
% Difference Year Over Year |
|
| Volume | Counts |
Average Price |
|
|
St. James City |
-0.51% | 0.00% | -0.51% |
|
Sanibel |
-10.31% | -20.83% |
13.29% |
| Punta Gorda | -4.08% | 11.11% |
-13.68% |
|
North Fort Myers |
-17.00% | -28.87% | 16.68% |
|
Miromar Lakes |
-18.96% | 40.00% | -42.11% |
| Lehigh Acres | -15.79% | -18.54% |
3.37% |
| Fort Myers Beach | 21.64% | 23.53% |
-1.53% |
|
Fort Myers |
-16.59% | -19.54% | 3.67% |
| Estero | 15.48% | -11.54% |
30.54% |
|
Captiva |
-30.60% | -50.00% | 38.79% |
|
Cape Coral |
-25.50% | -28.85% | 4.70% |
|
Bonita Springs |
49.96% | 5.98% |
41.49% |
|
Bokeelia |
45.72% | 10.00% | 32.47% |
| Alva | 70.63% | 20.00% |
42.19% |
2019 Market Outlook for Lee County: Pricing
2019 Market Outlook for Lee County average pricing since 2009.
2019 Market Outlook for Lee County average pricing since 2015.
The trendline shows growth more in line with inflation than an external growth pattern.
2019 Market Outlook for Lee County: Sales counts by property type
Sales Counts by Property Type
| 2017 |
2018 |
The difference by % year over year. |
|
|
Single Family |
12,519 | 13,295 |
6.20% |
| Villa Attached | 811 | 884 | 9.00% |
| Low Rise (1-3) | 3,466 | 3,643 |
5.11% |
|
Mid Rise (4-7) |
709 | 778 | 9.73% |
| Townhouse | 742 | 738 |
-0.54% |
|
High Rise (8+) |
522 | 522 | 0.00% |
| Manufactured | 587 | 702 |
19.59% |
2019 Market Outlook for Lee County: Pricing by property type
| Average Price 2017 | Average Price 2018 |
The difference by % year over year. |
|
|
Single Family |
$319,728 | $335,470 | 4.92% |
|
Villa Attached |
$207,076 | $222,212 | 7.31% |
|
Low Rise (1-3) |
$206,005 | $209,948 | 1.91% |
| Mid Rise (4-7) | $266,539 | $263,556 |
-1.12% |
|
Townhouse |
$187,575 | $195,226 | 4.08% |
| High Rise (8+) | $512,338 | $526,010 |
2.67% |
|
Manufactured |
$106,816 | $110,881 |
3.81% |
2019 Market Outlook for Lee County: Cash sales metrics
| 2017 | 2018 | The difference by % year over year. | |
|
Number of cash sales |
7,988 | 8,306 |
3.98% |
| Cash % | 41.06% | 40.22% |
-2.04% |
2019 Market Outlook for Lee County: Distressed sale metrics
| 2017 | 2018 | The difference by % year over year. | |
|
Bank Owned |
630 | 454 | -27.94% |
|
Bank Owned % |
3.24% | 2.20% |
-32.11% |
|
Short Sale |
100 | 79 | -21.00% |
| Short Sale % | 0.51% | 0.38% |
-25.58% |
| Total Distressed | 3.75% | 2.58% |
-31.22% |
2019 Market Outlook for Lee County: Waterfront/Gulf Access metrics
| 2017 | 2018 |
The difference by % year over year. |
|
|
Gulf Access Counts |
2764 | 2797 | 1.19% |
|
Gulf Access % of sales counts |
14.21% | 13.55% |
-4.67% |
|
Waterfront Sales Counts |
6620 | 7028 | 6.16% |
| Waterfront % of sales counts | 34.03% | 34.04% |
0.01% |
2019 Market Outlook for Lee County: Supply and demand overview
As of 1/16/2019 @2:31 PM we have 6.11 months Inventory for Lee County Residential Assets listed in the MLS.
2019 Market Outlook for Lee County: Inventory by City
|
City |
Active listings | # of Sales in the last 12 months | 12-month burn rate |
Number of months inventory |
| Lehigh Acres | 746 | 2143 | 179 |
4 |
|
Cape Coral |
2613 | 5846 | 487 | 5 |
| Fort Myers | 3144 | 6651 | 554 |
6 |
|
Alva |
80 | 164 | 14 | 6 |
| North Fort Myers | 531 | 1073 | 89 |
6 |
|
Estero |
807 | 1425 | 119 | 7 |
| Bokeelia | 67 | 108 | 9 |
7 |
|
Matlacha |
21 | 32 | 3 | 8 |
| St. James City | 125 | 179 | 15 |
8 |
|
City |
Active listings | # of Sales in the last 12 months | 12-month burn rate |
Number of months inventory |
|
Bonita Springs |
1199 | 1710 | 143 | 8 |
| Punta Gorda | 51 | 72 | 6 |
9 |
|
Fort Myers Beach |
363 | 465 | 39 | 9 |
|
Miromar Lakes |
74 | 80 | 7 |
11 |
| Sanibel | 343 | 347 | 29 |
12 |
2019 Market Outlook for Lee County: Inventory by Zip Code
|
Postal Code |
Active listings | annual sales counts | monthly absorption | Months of inventory |
|
33972 |
104 | 350 | 29 | 4 |
|
33971 |
151 | 504 | 42 |
4 |
|
33976 |
114 | 335 | 28 | 4 |
| 33907 | 159 | 447 | 37 |
4 |
|
33905 |
224 | 615 | 51 | 4 |
| 33991 | 302 | 828 | 69 |
4 |
|
33974 |
121 | 330 | 28 | 4 |
| 33909 | 322 | 878 | 73 |
4 |
|
33973 |
22 | 58 | 5 | 5 |
|
33990 |
266 | 693 | 58 |
5 |
|
33967 |
219 | 526 | 44 | 5 |
| 33936 | 236 | 563 | 47 |
5 |
| 33919 | 462 | 1102 | 92 |
5 |
|
33917 |
286 | 631 | 53 | 5 |
| 33966 | 167 | 366 | 31 |
5 |
|
33914 |
726 | 1517 | 126 | 6 |
| 33928 | 512 | 1052 | 88 |
6 |
|
33913 |
478 | 970 | 81 | 6 |
| 33901 | 194 | 388 | 32 |
6 |
|
33904 |
558 | 1103 | 92 | 6 |
|
33912 |
355 | 661 | 55 | 6 |
|
33993 |
468 | 861 | 72 |
7 |
|
33903 |
248 | 447 | 37 | 7 |
| 33916 | 220 | 389 | 32 |
7 |
|
34135 |
832 | 1389 | 116 | 7 |
| 34135 | 832 | 1389 | 116 |
7 |
|
33908 |
816 | 1355 | 113 | 7 |
| 33922 | 67 | 109 | 9 |
7 |
|
33956 |
126 | 179 | 15 | 8 |
| 33955 | 51 | 72 | 6 |
9 |
|
33931 |
366 | 468 | 39 | 9 |
| 34134 | 569 | 581 | 48 |
12 |
|
33957 |
341 | 346 | 29 | 12 |
|
34119 |
24 | 24 | 2 | 12 |
|
34110 |
29 | 24 | 2 |
15 |
In real estate, any market with less than 6 months is considered to be a “seller’s market”. When the inventory is over 6 months it is considered to be a “buyers market”.
2019 Market Outlook for Lee County: Distressed market update
The negative price pressure from the last cycle was driven by distressed sales. This was the aftermath of a mania. We prepare a report each month about this, here is a link to the December 2018 Lee County Florida foreclosure report.
A word of caution about listening to Real Estate Agents who speak on their production.
- Most agents can not see past their own financial status.
- There are a lot of agents right now. These are only Residential sales in the MLS.
–7,088 Agents had at least a closing in Lee County for 2018.
–4,932 Agents had at least 2 closings in Lee County for 2018.
–1,143 Agents had at least 10 closings in Lee County for 2018.
–345 Agents had at least 20 closings in Lee County for 2018.
Trends to Watch
-
2018 was pretty awesome across the mean.
-
3 months had more than 2,000 sales!
-
That may be hard to beat.
Is almost all of the new construction trading outside of MLS or do we lack truly lack inventory?
- There are 153 homes with a year built 2017 and newer, that are active as of 1/16/2019.
- 843 have sold in the last 365 days.
- That is 2.17 months inventory.
2019 Market Outlook for Lee County: Cape Coral Single family Building permits
2019 Market Outlook for Lee County: Outlook for the retiree markets
2019 Market Outlook for Lee County: Possible overleverage points (These are national Stats here)
This is for commercial and industrial debt as reported by the Federal Reserve bank. Notice the growth since the last cycle.
This chart shows the growth of residential debt, notice at the time of this chart, it has not surpassed the levels of the last cycle. I not saying it will not correct in the next correction but this is illuminating as to potential levels and intensity of correction.
2019 Market Outlook for Lee County: In conclusion
-
- 2018 was a great year from a statistical perspective.
- It may be tough, just by the sheer numbers, to beat that year.
- In 2016, all of the economic talking heads were calling for a recession 2 years out. In 2018, they were saying the same thing. At some point, it has to happen.
- We have 2 different economic trends happening in real estate. The Baby Boomer generation retirement and the Millenial/Gen Z coming of age. Each will have different and specific impacts on the market.
- This market does not share the same modalities of the 2006 crash. If and when a correction happens, it will be different in intensity and duration. Using the last correction as a playbook can be problematic.
- December 2018 was pretty awful from a statistical point of view, January 2019 appears to be on the same path from a year over year perspective. Is this a trend or just the economy playing wait and see with the Macro pictures trials and tribulations?
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source https://swflreia.com/2019/01/28/2019-market-outlook-for-lee-county/
