‘All Their Eggs In The Condo Basket’: Fort Myers
The New York Times found a city in Florida with a condo problem. “As the stepchild to its more beautiful sisters in southwest Florida, Naples and Sarasota, this city has struggled for decades to revitalize its picturesque downtown and attract snowbirds and tourists. Now, the historical buildings are no longer deteriorating; many have been rehabilitated using preservation tax credits and other tax abatement measures.”
“And yet much of downtown is still vacant, leaving some people in Fort Myers to wonder, What if you rebuild it and they still don’t come? ‘The city leaders have put all their eggs in the condo basket,’ said Warren J. Wright, the councilman for downtown Fort Myers. ‘They said, if we build enough condo units, then downtown will come back to life. But the way the economy is going, I’m not sure they’ll ever get built.’”
“The Beau Rivage, the first high-rise tower to be built on the Caloosahatchee River in 15 years, opened in October 2004. It all but sold out before construction began. In short order, the city began approving high-rise condo projects for a total of 3,600 units. Fort Myers also proceeded with a $30 million downtown street improvement project, and spent millions expanding the airport.”
“But the Beau Rivage might become the harbinger of a market slowdown. A year ago people here worried that Fort Myers..would be overdeveloped. Now some are concerned that wealthy condo dwellers might not save the city after all. Open more than a year, the Beau Rivage is only 35 percent occupied at the height of snowbird season, when Northerners come to Florida. Many of the units have already been flipped once, and 26 of the 124 units are back on the market.”
“At least one investor based in Fort Lauderdale, barely made his money back when he sold five units in a hurry; Beau Rivage’s management acknowledged that he escaped a loss only because he bought into the complex at a discount rate.”
“Three of the nine projects that have been approved since the master plan was adopted are under construction, with three more high-rise projects in the process of approval. But one developer recently tried to sell its riverfront property in a deal that fell through.”
“‘The city has approved all these condo units on the river and didn’t pay any attention to the other pieces of the puzzle,’ said Marsa Detscher, an urban planning consultant who lives in Fort Myers. ‘I’m not anti-growth, but you can’t redevelop a city based on high-rise towers alone,’ Ms. Detscher said.”
“‘I don’t know why there aren’t more people in Beau Rivage,’ said Donald Paight, executive director of the Fort Myers Downtown Redevelopment Agency. ‘But I’m very confident that all of the towers that have been approved will get built. Developers have already invested millions of dollars on land acquisition, design and permitting. People will be living in them eventually.’ He added, ‘If an investor doesn’t make as much money as they hoped, I don’t really care.’”
Thanks to the reader who sent this in.
Mr. Paight apparently takes a stand I happen to agree with.
If the asking price falls low enough, there will actually be people living in the towers, as opposed to uninhabited, flipper owned vacancies.
It’s true.
Millions of people, as opposed to investors, are currently sitting on the sidelines, riding the storm out. I’m one of them. I’m the reason there won’t be a recession. I simply refuse to buy until asking prices fall by 50%.
And they will.
When prices drop low enough, I’ll buy.
Times me by millions and you have the ‘white knights’ who’ll come to the aid of the soon to be ‘depressed housing sector’.
Mr. Paight is actually interested in the quality of life in downtown Ft, Myers, instead of fretting about how much property tax an overpriced sale of a condo could bring in.
It’s refreshing, and I hope we hear more of this.
There could be a recession because there are many people who have used very foolish financing schemes–like “interest only” adjustable mortgages–who are depending on making a profit in order to survive.
And these aren’t all investors looking to make a quick buck! I know some young folks in Florida who, even though they could RENT for far less, and invest the difference in safer investments, opted to buy slapdash-condo-conversions with adjustable mortgages.
Many of these folks would end up defaulting on their mortgages when their adujustable rates go up, flooding the market with defaults.
Here is the situation… Mr. Paight should care very much that investors make more, because it is investors that will drive the success of d’town Fort Myers. The Beau Rivage was the pioneer of the downtown re-vitalization. Homes For America was able to acquire the land for a song and combined with lower building material cost the investors were able to get in at some $220 sq ft. The newer projects are going for b/w $400-$500 sq ft. The BR is still a most compelling value at below $400sf (resale)and yet the market is saturated with resales. Newsflash: these new (higher cost) developer and investor high rise properties will sit vacant and investors will take major losses in long-term carrying cost. The city should be working with the investors to drive in new retail, business and tourism so everyone makes money. The public pronouncement that Mr. Paight does not care about the investor is both naive and dangerous. Time to find a better man for the job someone with understands who is responsible for funding the master plan.
Better hope that interest rates don’t price you out of that 50% off bargain.
Wont matter if I pay for that 50% bargain with 100% down.
Bubble Butt,
Exactly!!! The RE shills don’t understand that if you have cash, interest rate matters less, as you hope the price comes closer and closer to your cash payment. Couldn’t agree with you more!
http://www.zillow.com/
has arrived just in time for burst
Yeah this definitely smells of seeding.
Wow, that is a very cool implementation of the map technology.
Zoom in far enough, and you can see lot-by-lot pricing overlaid on the street map with ariel photographs in back. Then you can drag the map around the neighborhood….
Fort Myers does have short-term problems but the airport expansion was key, it is really busy… remember that SWFL is still a huge vacation destination.
they haven’t worked all the bugs out of that zillow.com search engine. a house i just sold is valued way off the mark.
Yeah, I looked up the loft I’m renting and they peg the value at between $433,000-645,000 w/ a Zestimate of $516,086. The accessed value is currently $292,000 and I wouldn’t pay more than $175,000 for it - and, if I offered they would probably take the money and run. But, I’m not offering. My rent is far less than what it would cost to own, with the HOA dues alone at $800/month. Don’t know where it came up with the Zestimate, but is really is still in Beta.
very beta, and other than the novelty factor far from being useful especially when it’s depending on doing their valuation from faulty tax aessesor records from where they are getting them I have no clue. I would assume it’s fairly more accurate for newer housing tracts. I for one being a seller would be fairly ticked off especially when that little stock ticker they have next to their valuation starts showing that downward trend and he’s already a 100k in the hole.
Homes in my area of Philly that are going for over 200K are listed as 25K…so ya, there is some refinement to be done
Awesome site tho!
Dreaming in ‘07 -
If you live in North or West Philly they WERE $25k houses not too long ago, asking $199k now will go back to about $70k….
Philly has always been cheap for a reason - if you observe the average Flyers fan for about a day you will see why….
I am an agent too, and I checked a couple houses to see what the site would come up with. It valued one of the houses 18% above what it just sold for last week after months on the market. It valued another one way over, and another way under. These didn’t seem like tough houses to comp either. The degree to which it was off surprised me.
Interest rates don’t really apply to me.
With my money earning interest right now, and with all the money I’m saving by renting, and with the amount of time I expect to wait until buying (the end of ‘07)…
…with all of that, I’m going to be able to buy 50% or more of whatever I pick- in cold, hard cash. My wife and I will be able to easily purchase in the $500,000-$600,000 range. What is currently listed at $1.2 million will become ours in a year and a half.
Interest rates? They could go to 9, for all I care.
Big friggin’ deal.
We saw, we saved, and we ignored the hype.
Millions of us. Millions and millions and millions.
Greenspan expects rates to potentially hit 5. What impact will this have on the 3 year interest only ARM holders?
http://money.cnn.com/2006/02/08/news/economy/greenspan.reut/index.htm
“Short-term interest rate futures fell on talk of Greenspan’s speech, reflecting increased views that fed funds will hit 5 percent by mid-year. Chances of fed funds at that level hit a new high of 82 percent, from 66 percent earlier”.
Greenspan expects rates to potentially hit 5. What impact will this have on the 3 year interest only ARM holders?
The indicies that determines the reset rates on ARM’s, like the one year treasury and 6 mo LIBOR, take their cue from the federal reserve, in fact they usually adjust upwards or downwards before the fed makes their move. For example, the one year T-bill this week is at 4.60%, will probably be 4.70% next week. The 6 mo LIBOR is probably at 5.00%. Whoever has a 3 year ARM, IO or fully amortized, will see their rate increase by 2%. The key will be if they have an ARM where they have to repay the principal. The ARM’s out today have the IO feature for 10 years, even though the teaser period is shorter. With the earlier IO’s, such as three years ago, the IO period ended with the teaser rate. I hope those folks were able to sell their homes before it happened, just like the loan officer told them it would.
I saw something brand new in a San Diego mall today. A Real Estate Agent opened a Kiosk in the mall to help spur on business. They haven’t had to do that in years…
http://www.zillow.com/
has arrived just in time for burst
————————————–
According to zillow, I could have made more money last year by just living in my NorCal condo and spending my days on the beach than working, and that is a pre-tax comparison (taxes on the condo would have been $0). They estimate that under current market conditions, one can make $337K/year by just living in an East Bay condo. So I guess money still grows on trees after all; I stand corrected.
Zillow says the house I bought in ‘96 for $265k is worth $988k today. Sure…it’s just a bubble mirage, but it still makes me feel all warm and fuzzy inside.
Comment by Auction Heaven in ‘07
“Millions of people, as opposed to investors, are currently sitting on the sidelines, riding the storm out. I’m one of them. I’m the reason there won’t be a recession. I simply refuse to buy until asking prices fall by 50%.
And they will.
When prices drop low enough, I’ll buy.
Times me by millions and you have the ‘white knights’ who’ll come to the aid of the soon to be ‘depressed housing sector’.”
If all the ‘white knights’ on the planet stepped up to the plate tomorrow and made good on offers to buy out all the FBs in the whole country at 50% off, there would still be a recession. Too many folks are underwater and would come up short by selling at 50% off. And too much recent consumption spending (which recent changes in the RE market will bring to a halt) came out of that 50%. And the 50% off sales will not come until these folks have spent themselves into a desperate corner.
Richard Russell’s comments today:
“Housing — From the fundamental standpoint, I continue to believe that the way the housing boom (bubble) unwinds is the KEY to the US economy this year and probably for the next few years. From the standpoint of the US consumer, nothing compares with the $18 trillion value of residential real estate.
Nationwide, there were 2.8 million existing homes and condos on the market at year end, according to the Realtor’s Association. This is up 26% from a year earlier. Adjusted for seasonal variations, inventories have climbed 38% since last April — this is the largest eight-month increase on record.
Recession nothing if housing prices dropped 50% immediatly (1 year) you wouldn’t have a recession you would have a depression, even if that were just the bubble markets. Probably half the financial institutions in this country wouldn’t be standing (and the rest would be massivly transformed) under that senario. Consumer spending has been growing at 7-9% annually for the last three years while wages have been essentially flat.
Under helicopter Ben and a 3-6 Trillion dollar housing write down, I’m not entirely sure you wouldn’t find your liquid dollars inflated quite rapidly to futility as prices zoomed up.
cereal says…
“a house i just sold is valued way off the mark.”
Zestimates zuck. Don’t bet the house on them.
Yes, Zillow is still betaware, and the “Zestimate” prices are based on lagging-indicator comps (as are any Realt-Whore’s estimates). Even so, I bet there’s less room for deliberate distortions and error because Zillow has no reason to “game the comps” in favor of always-higher prices.
One of the best features of this site is it graph a timeline for any home’s appreciation/depreciation (the giant bulge since 2002 for my current place is really striking) and it provides you with the past sales history, without having to go to the County Assessor’s office or website.
Despite its current shortcomings, I still say it’s one small blow against information assymetry, one giant leap for buyer-kind!
I wouldn’t exactly depend on the comps either. A house I looked up on the site had no comparable comps when I know for a fact there were three that were missed ie: I comped a three bedroom house it gave me 1 3 bdr and 3 2bdr comps and none were in that 10% in regards to square footage with like I mentioned 3 3 bdr comps that I knew of that were in the bullseeye that an appraiser would use to establish value. It’ll be interesting to see how long it takes them to correct that
Paying cash in a few years may be possible for the small minority. Interest rates topping out a 9% would be great. Anyone remember the early 80’s? Rates went from 14 to 18%. I got a 1 year Arm in 1985 at over 9%. Yes folks they had ARMs then and also neg.am. loans.
If buuble butt can pay cash fine. It doesn’t mean the cost owning is any lower. One must factor in “opportunity cost”. Those CD’s may be paying quite well at that point. And that interest is not tax preferred as mortgage interest is. Long story short - there is no free lunch.
Once upon a time, most retirees paid cash for their retirement houses. Only recently has the “mortgaged-for-life” model emerged.
Anyway, while your “opportunity cost point” is correct for younger people, it probably does not hold for all (or even most) retirees. Retirees are already eating into their capital…higher interest rates just allow them to spend even more.
I remember the early 80s as well. Would have loved to have some 30 year bonds at 15% interest. My goal is to not have any housepayment and hopefully be able to put any excess cash to work at the higher rate if it happens. I feel my best opportunity would be to have the flexibility of no house payment. Anyway, I will be glad to have the choice if it happens….
Vainvester, thanks for the interesting post.
“Millions of us. Millions and millions and millions. ”
Im with you…. 50% off then we will talk
50% off and I might buy two!
Comment by Auction Heaven in ‘07
2006-02-08 16:06:56
Interest rates don’t really apply to me.
With my money earning inte
Sorry, gotta figure out how to use this new format. Auction Heaven in 07 says interest rates won’t bother him. I’m in the same boat - sitting on cash and waiting. May not wait for a 50% drop and hope it’s sooner than 07 . . .but wait I will and I’ll bet there are lots of us!
Does anyone know how much real estate prices fell during the Great Depression? This was the worst financial mess in our history and I think we might be able to work off this number. In no way do I expect anything anywhere near as drastic- but it would be good for comparison sake.
It is my understanding that SFHs sold for about 10% of the peak prices at the bottom of the Great Depression. It was not popular to own real estate because so many had lost theirs through foreclosure. So the smart folks rented rather than bought.
Remember that unemployment rose to 25% then. Banks failed. Employers went into bankruptcy. Even towns and cities went bankrupt.
Sadly things are worse now then they were leading into the Great Depression.
I don’t think houses doubled/tripled in value a few years prior to the Great Depression. The house prices might have been fair to begin with during the depression, but the lack of demand hurt the market.
The economy is definitely on a bad path. Bush/Greenspan didn’t help.
vainvestor: didn’t they fall something like 50% or more…I recall a figure of 70% but can’t bet the farm on it…
I went on a tour of a mansion in Newport, RI last weekend that was built around the turn of the 19th/20th century for about $2million. In the mid 1930’s it sold for $21,000 (NOT A TYPO).
yes, Virginia, real estate can drop like a rock
Wonder if the planners thought about bringing business and hence jobs into downtown first and then building the condos?
My impression was that Fort Meyer’s had pratically no job market or major employers beside perhaps the hospital if you happen to be a surgon or nurse?
May be a good purchase when they go back to thier proper market value at around $79,990 for a 1 bedroon!
I know that Chicos (Women’s clothing) Robb & Stuckey (high end furniture) are headquartered there. A whole slew of CEO’s retired and still working have homes there, Sanibel and Naples. Lots of money is down there. Unfortunately, downtown has never seemed very busy, and while they’ve spent a lot of money making it nice, there aren’t many residents. I remember reading an article a couple of months ago about some businesses that are failing downtown because they don’t have any business. My whole family lives down there and do quite well, but I imagine the majority of jobs are of the service variety, working for the folks that have retired down there with some money. I know lawyers, investment bankers, etc. also do pretty well there, too.
that — the question of jobs to support housing — seems to be the fundamental problem with this entire nationwide bubble. everyone is looking at the real estate prices and saying, “who can afford this?” if the jobs/wages in an area can’t support the market prices, then obviously those prices will go down.
On the east coast of Florida, where I live, there is a new condo on the river that looks to be maybe 10% occupied in this, our peak season. And there is less employment here than in Fort Meyers.
I, too, am sitting on cash waiting for the right 100% down purchase, while renting a great place at a bargain price.
Instead of: ‘build it and they will come.’
Why not: ‘create good jobs and they will come.’
OT, but I believe that zillow is spamming this blog.
Very possible, but it’s also the top story at CNN Money. Zillow posts showed up all over Craigslist too. So either people are reacting to the article or it is part of Zillow’s marketing campaign.
Can anyone tell me what recourse a renter has if your landlord goes into default/bk on the property you’re renting? Do you get pitched out on the street?
I bet lots of distressed properties will be renting at cutrate prices in some of these markets as desperate “homeowners” try to staunch their negative cash-flow hemmorhage. Should renters be wary?
Depends on where you live and the lender. Here in Cali the lender will give you your walking papers (eviction) pretty quick and you can kiss your deposit goodbye if your renting a single family. An apartment complex your pretty much safe.
Most people do not know that the Florida 1926 Real Estate Crash was bigger then the 1929 stock market crash!
Millionaires, yes that is right, 1920s had millionaires everwhere in Miami!
“Land that was bought for $1 million could, within six months, be resold for $4 million before crashing back down to the pre-boom $ 100,000 level.”
Millionaires at the end of 1925 had become poor folks by the middle of 1926.
Massive speculation then “The Big Blow” a massive Miami Hurricane and then it was all over, hmmm…could not happen again?
http://www.stock-market-crash.net/florida.htm
Reading more about the 1926 Florida crash - “If you look at the prices of some houses, you will see that after almost 70 years some houses are still selling for less than what the then owners paid for them.”
Ouch! Know that is an investment!
Auction….Amber,
It won’t really matter that much where the interest rates will be when the house prices go down. As Auction said, back in the 80’s interest rates were in the double digits…I bought in ‘79 and I recall 14,15 or 16% then. Interest goes up and interest goes down…just like the market, it is cyclical, too. There will be people to buy. The biggest thing that will look different is how much house (or rather, how little house) we will be able to buy then. So, in my mind, it won’t matter if people have all cash to buy or not.
I’m another standing on the sidelines, getting in position. I’ll be in good shape when the time comes to buy. My biggest concern is the selling price for the house/condo/townhouse, and I, too, won’t be looking until they slide past 30-35% of the price of my targeted square foot dwelling…in other words, a $450K will look much better to me at $292.5K.
BayQT~
New Century is hiring “Foreclosure Specialists” in Orange County.
http://orangecounty.craigslist.org/acc/132039320.html
In the interview, I’d ask how many of those billions would I be responsible foreclosing on.
test
LOL! A haircut of 50% will ensure a nasty recession.
As Getstucco suggested above, a ‘white knight’ is someone who’ll buy at minor discounts of 5 - 10%. You and the other millions won’t be rescuing any grateful damsels in distress by offering 50% of current prices. If that’s the tipping point for buying in, then a recession is guaranteed.
does hurt to do a revision in history lesson
Real Estate News Summary, Part 138, November-December 1992
pscale Los Angeles real estate broker Fred Sands has a sober message: Cut
asking prices for homes drastically or forget about a sale. “If you don’t
need to sell, put it away for the next 3 years.” Residential prices still
are dropping. Buyers are scarce, and they will only buy bargains. In many
cases realistic prices have dropped by 25% from the final spike levels of
the boom. [Associated Press]
Academics, securities analysts and even Realtors agree that home price
drops are a lot higher than reported by the California Association of
Realtors. CAR reports indicate the median price for a previously occupied
single-family California home declined 6.4%–to $197,540–in Q3 ‘92 from a
peak of $211,000 in May 1991. UC Berkeley’s Center for Real Estate
estimates California prices have fallen 10% to 25%. CAR says the median
house price in the Bay Area in October was $249,380–down 8% from an all-
time high of $271,000 in July 1989. [San Francisco Chronicle]
My wife and I were on our way to Tracy to visit her folks, and on the way we
visited a development off of Montague Expressway in Milpitas. When I asked
about price they immediately offered us $25,000 off, and 5%-down financing.
That’s not bad for openers, and I believe we could have bargained them down
much more than that if we were interested in buying.
Kaufman & Broad ran an ad in the San Jose Mercury News titled, “At This
Blow-Out Sale YOU Name The Deals!” You now have the chance to cut a deal
that’s simply unbeatable. Make us an offer! You’ll enjoy thousands of dollars
in extra savings, with your choice of custom upgrades and options. Imagine
huge credits you can use toward: Non-recurring closing costs, Decor allowances,
Customizing upgrades, Landscaping packages.
Indeed, interest rates were much higher than 9% in the 1980s. I remember I was 25 years old before I got my first car loan at less than 20% interest. (And that was at 7% for a new car with a manufacturer-supported interest rate.)
I think we are ignoring the issues in the article.
Smaller towns all over Florida from Tallahassee to Ft Myers are betting the farm on these condo projects to revive downtown areas.
They are ignoring whats really going on, the problem in the real world is why the heck would people want to live in a small condo in downtown Ft Myers when for the same money they could own a home 15-20 minutes away? Condos are not family freindly.
What we end up with is speculators buying up 80% of the condos with the rest typically going to vacation home buyers, the result… Empty buildings with the first few floors designed for retail space, restaraunts and other commercial use. Since the buildings are empty that Starbucks, TGI Fridays and retail store even grocery store quickly close up shop and leave.
Our end result will be more “dark towers” spreading through out the state. Huge ugly condos that fill our onces prestine beaches and historic downtown areas that are basically empty, no lights on at night, they already look like black holes filling the Miami night skyline.
Exactly. When I was single, I lived in a condo with 8 years with other singles, and people who could not affford a house. An average condo was 1/2 the price of a similarly sized house. After marriage, with my wife and her dog, condo was no place to live and we quickly decided to sell it.
Talking about empty condos, even in a “lively” place like Orlando, lots of condos are sitting empty and looking for renters. The “high demand” areas like Celebration and MetroWest are no exception. Went to some condo communities in MetroWest and it felt like a ghost town, as you could hardly see any people around. One area with shops outside a large condo conversion (Hamptons), sits deserted with lot of openings for retail space. I did not see ANY customers in the shops that were open for business.
I see precisely zero spam from Zillow. I see a lot of people talking about it because it is 100% on topic and a very interesting site.
I’m afraid I do see spam. And if you Zillow folks are monitoring (and I know you are), again let me ask for the methodology on gathering house-value info.
I am guilty as anyone on posting OT things I find interesting, but even I can see too much zillow on these threads. But as long as this happens I will repeat: This site will get its revenue from the real estate industry — and we don’t know how the site gathers its pricing info.
Caveat surfer.
WillM: I have lived in Orlando for 4 years now, you are correct about metro west.
Its really sad when they take an older more affordable apartment complex that is 90-95% full and magically turn them into “Brand New Luxury Condos”. Once the residence finish out their leases or move out there is no one left.
There is a place over in Waterford called “The Crest”. Its been on sale now since May and has not sold out, they are offering 12 months off HOA fees I beleive. Go there on a Sunday night and there are no lights on and few cars in the lots. The only lights you see are shinning on their cheesy 20ft by 10ft yellow banner that says “Condos For Sale”. Flippers are getting desperate though, they have not sold out and are still on the market at the same price as May, some of those who bought this summer in hopes of quick riches are getting antsy and there are already listings for a 1bedroom at $179K when you can buy one from the developer for 154K and save on your HOA fees. This guy spent maybe 4-5 grand on new appliances and hard wood and slapped a “custom” coat of paint on it and is trying to get $25,ooo out of it.
Funny you should mention “The Crest”. My wife and I used to rent there when it was called “Brittany at Waterford Lakes” and had to move when it was converted to condos. Actually, we were given the option of buying (required by Florida law), but the asking price for my two-bedroom shoebox was $225k with condo fees of $270/month. I told them to forget it.
You are dead-on that the place is a total ghost town now…nothing but crickets and tumbleweeds. Just out of curiousity, I did a record search on the Orange County Property Appraiser’s website (http://www.ocpafl.org/docs/record_search.html). Approximately 80% of the units (221 of 276) are still owned by the developer.
It’s always been really spooky to be in florida off season and see the dark towers. i was in clearwater in September and the one next to the hotel was 99% (maybe 3 places lit) dark. Maybe the communities wanted to have this kind of place year round
less demand on services. Seriously FL is getting wrecked like every place else.
renting in ma:
You think Clearwater is bad, next time your hear check out Miami/Ft Lauderdale. Some of these condos are 50-60 stories tall. At 70 floors The Four Seasons is one of the tallest residential buildings in the world. 10 floors are actually the hotel, 40 and up are all condos.
Looks like a half dead, first half of the building at night is light up and then once you get to 40 the lights quickly start fading.
ft. myers is definitely the “poor cousin” to Naples and Sarasota (particularly Long Boat Key). Based on the demographics of swflorida, condos make alot of sense. Retirees, especially snow birds, don’t want the hastle of maintaining a single family home.
There is a ton of money in Naples; and I would assume Ft. myers to a lesser degree. An earlier poster makes a good point about mortgages. When my parents first bought a second home in Naples, they were the ONLY ones in their developement of 42 units to have a mortgage. Of course, they were still in their 40’s (25 yrs ago).
Now, fully one-third have inherited from their parents and, presumably, have no mortgage. How will this upcoming huge transfer of assets affect the buying power of the boomers - most likely the bulk of swFlorida’s market for the next 20 years.
And some people see black helicopters. There is no spamming here.
Who sees black helicopters? Spaceships, maybe, but helicopters?
A desire to return to the urban core is NOT the same as wanting to live in a converted hotel room. These inner city condo conversions have appeal to some buyers. Empty nesters, etc. Nice to be able to walk, instead of drive, as one gets older. But most people interested in this urban want townhouses, not studios.
The urban lifestyle of retired boomers is way over estimated. gordo
vainvestor: Keep dreaming… If all these baby boomers are out looking for condo’s in Ft Myers where are they now? Speculators are un-loading units and more and more are being completed. Inventories are rising daily.
In a bizarre twist of Irony many of the baby-boomers living in South Florida have been selling their homes to the very speculators who hope to flip the homes to retiring babyboomers. All the while the babyboomers are taking their profits and laughing there way up to Georgia and the Carolinas.
I think baby boomers have bigger issues on their hands. Yes a lot of them were buying “second homes” but I think the harsh reality is they were infact buying investment property in hopes of flipping them in hope of cashing in big to make up for a lifetime of little savings for the future hoping social security, disappearing pensions and medicare will take care of everything…
The oldest boomers are just now turning 60. I doubt too many have spent the last decade in SWFlorida. I am talking about the wealth-effect of the upcoming transfer of assets TO boomers. This combined with demograghics and the fact that older people like to retire to Florida. Just spend an hour or two in Naples and that fact becomes quite apparent.
I know nothing about the East Coast of Florida except that there is no comparison to the beauty of SWFlorida.
vainvestor: The people you speak of who are older in Ft Myers and Naples moved there because it was cheap when they bought it 4-5 years ago…
And all the wealth transfer and babyboomers you speak of? Have they all signed contracts to move to Florida when they retire?
Is there a law stating that so many people have to retire in Florida (let alone south west Florida)?
I think what we are going to see is retirees spreading out. Yes some wealthy retirees might choose South West Florida but many will choose other parts of Florida. Check out “The Villages” its an hour or so north of Orlando and is quickly becoming one of the largest cities in Central Florida they own pretty much the entire north half of Sumter County (and its a 55 an up community), Ocala, and the Panhandle. Retirees are choosing cheaper locals in the state as well as making places like Arizona, New Mexico, Texas, the Carolinas and (pre Katrina) the Mississippi & Louisanna Gulf Coasts their retirement spot of choice because South Florida is becoming too expensive and too over crowded. Pulte and a few other developers are even venturing into Mexico to build communities, Mexico is perfect for retirement… its very cheap, cheap prescription drugs and the dollar goes very far. I predict by 2010 we will see developers building planned communities south of the border for American Retirees.
The next wave of retirees is going to be very different from the retirees of the past. They are going to be more active for one and not going to sit around and play shuffle board and bridge all day… They are also faced with high health care costs, lost pensions & retirement benefits, little in social security and even less saved. Yes they might have a lot of equity in their homes up north, but have you checked lately? Areas like Boston, Chicago, Washington DC, NYC… Homes are not selling up there, speculators have left the markets and entry level buyers can’t afford the prices so high priced homes sit on the market for months and months.
I don’t disagree with you entirely, but am looking at history as a predictor of the future. Retirement and Florida seem to go hand in hand. Obviously not for everyone. I am only saying that the same overall percentage of retirees will continue that southern migration and that since there are so many more (number wise) retirements coming in the next decade that Florida should be fine.
I would go to Mexico in a heartbeat, but I doubt my husband would.