WHY THEY CAME VARies, what they wanted when they arrived differs, what they have now may or may not be what they expected. But the result of newcomers to Southeast and Southwest Florida seeking better lives has been a kind of hot market chaos with hugely dwindling inventories and skyrocketing prices.
That’s proven good for many and difficult for many others, including longtime residents forced out of rentals they once could afford, buyers having to offer cash above a listing price the first day it’s listed without seeing the property in person, or homeowners deciding to sell at a time when property values jumped 30% in 2021 alone, then watching the home value continue to rise after they’ve moved out.
No one in the real estate business or their clients buying, selling and renting homes have ever experienced what’s happened since the late spring of 2020, they say, when the newcomers began arriving.
“It was low interest rates fueling the fire, people fleeing the urban North and causing a tremendous population boom, a lot of people trying to gobble up limited inventory of housing and rentals — and there’s a strong correlation between rising homes prices and rent prices,” says Nelson Taylor, an analyst and the vice president of Market Research for LSI companies on the southwest coast.
He tracks the number of new driver licenses issued. “Between January 2021 and January 2022 we added almost 40,000 people in the three-county area, the highest percent gain since I have been tracking it. That many people moving down here puts a strain on existing inventory and drives up prices across single family homes and apartment rentals.”
But other factors brought floods of solvent migrants from the North, too, suggests Vince Marotta, a Palm Beach County Realtor whose average sale price is $6.5 million.
“People talk about taxation — no state taxes in Florida — and they talk about COVID because they didn’t want to be indoors (in the urban North) and they could be outdoors, as reasons for moving here. But to me one of the biggest factors is Zoom calls. Zoom calls made people realize: You do not have to live in Manhattan. You can live in Palm Beach Gardens, Zoom with your clients in the morning, and play golf in the afternoon.”
That is, if you can find the home you want when few are for sale.
The prices of homes and rental properties from Collier, Lee and Charlotte counties to Palm Beach County are at unprecedented highs, while the competition to get them has given the advantage to cash buyers or deep-pocket renters sometimes paying well over the list price.
As a result, working people without sizeable incomes or even with them, people buying or renting, can face large anxiety or significant real hardships, on occasion, as some stories below suggest.
The market may be leveling out now, with inventories still low but on the increase — the experts say it is.
Here, meanwhile, Florida Weekly offers the voices of people affected by the market explosion in the last 18 months.
• DENNY BOWERS of the Bowers Group in Naples had to relearn the selling business:
“Clients are flying in tomorrow and I will spend three days showing them houses and neighborhoods, educating them. You couldn’t do that in the spring or last winter. For the last two years it’s been crazy. People didn’t have three days. You buy the property, then you fly in and see it. It was like that.
“We’ve had two phases in this market. The first part: 2020 started strong, then COVID hit. We were fortunate to be in Collier County, where we were open.
“Once we opened back up as a state in May 2020, people started to come down. So the back half of 2020 was busy but controllable, and the appreciation started to happen — you had to get more aggressive with listings on the sales side, and on the buying side, you were going to have make a strong offer.
“Phase two started in January 2021. It was like all hell broke loose. A lot of people we were working with through the fall and winter of 2020 — we knew what they wanted, you could go look, send them videos and they’d fly down and look themselves.
“But in January 2021 and into February, I did not get a single offer for a buyer because it was so crazy and I kept trying to do that. I’ve never experienced anything like it. A buddy said, ‘Your care is getting in the way of a sale.’ I always built my business on spending days with clients, funneling down what they’d like, educating your client, making an offer and maybe going back and making a second offer. But this was like relearning your business
“We had people from California and North Jersey and elsewhere, and we had to say, ‘Hey, we need to make sure — if they want this house, we have to write it in a way that makes sure they’re going to get it.’”
• VERONICA DEL CARMEN REYES is a homemaker and mother of four who hopes to buy a home eventually. Her husband installs screens and pool cages and her mother lives with the family:
“We spent the last eight years renting a house (in Fort Myers) and at the last minute, in March, the landlord sold it. We were paying $1,200 a month. We are three adults and four children. There was nowhere to go.
“I spent a lot of time looking for rentals, and couldn’t find any. A neighbor let us come to her house, gave us a room. We were there a month, then moved.
“We found a house in Fort Myers Shores, we went to look at it, I even put down money for a deposit. It was $1,600, a rent-to-own. If we rented for six months, we could buy it. But when we opened the house, it smelled so ugly we got sick, we were vomiting, we had no idea what it was. (Neighbors suggested someone may have died there and not been found for several days.) We had given first and last rent and a deposit, and they didn’t want to give back the money. So finally I told the landlady I would call the police. It scared her so she returned the money.
We found a place in Lehigh. There were 14 other applicants, but the person doing the renting picked us because we have kids. We slept some nights in the car. He said, ‘You can’t be in the street, you have kids.’ So now the whole family is there. Our children are 17, 12, 7 and 5 … and we have my mother. We’re paying $1,400 for three bedrooms, two bathrooms, and with the electric bill it’s $1,600 in the center of Lehigh Acres.
“We pay everything — rent, lights, telephone, insurance, and sometimes we’re short. We get help from food stamps.
“I had to change the kids’ schools, they’ll start in August.
“The hardest thing about all this was the kids. When the kids would pass the old house, they’d say, ‘Why can’t we go back to the house?’ They wanted to play under the old tree. When we went by the old school my 12-year-old daughter started to cry. The kids got depressed, but now in the new place they’re starting to play again.”
• PAM LEMMERMAN is a Fort Myers Realtor with Barclay’s Real Estate Group:
“I had some clients who wanted a house that had 18 offers on the table. Now the cash buyers are slowing down.
“Before this whole boom you’d spend a lot of time with your buyers, you’d have to know what they want, to have an eye for what they’re looking for.
“For some, they don’t want anything with a pool. For others, that’s the top priority. I have people who want in country club or golf course settings — so do they need three different pools, a restaurant, and the golf view, the lake view or the preserve view?
“Before, there were more properties you could show. Now, once we start narrowing it down, the inventory may be limited.
“I try to guide them. I might show them what $300,000 can get them, for example — so do they want to buy now, continue to rent, or up their budget?
“I highly recommend getting pre-approved. Go to a lender, go to a bank, find out what you can afford, what you’re comfortable with — and factor in your taxes or insurance. All will be part of it if you take out a loan.
“Then come back to me and say, ‘this is our max.’
“I have some VA buyers, they came to me a year ago and I’ve been working with them. I put in 12 or 15 offers for these people and we went through a whole year. Everybody had cash, cash, cash — they got beat out because of cash offers.
“If you’re financing, you’re contingent on an appraisal. So I ask people: Are you willing to make up the difference? On an appraisal, the appraiser might not be up to speed if people want it bad enough. So if a home sold in January for $300,000, it might be worth 12% more now.
• MAUREEN O’SULLIVAN is a public relations professional who lived in the town of Palm Beach for many years, until her recent move:
“All my clients by and large are based in Palm Beach or do their fundraisers and special events here.
“Being a single person, living close to where I work and getting home easily and quickly and safely is my lifestyle choice. I’ve lived on Oleander Place in three different apartments for 30 years, the last one close to 14 years. I loved it; I had a wonderful landlord. I used to, joking, tell her if I ever left it would be feet first. She was kind and considerate enough to give me ample advance notice when she decided to renovate the apartment.
“I knew I had to move by Aug. 1. I felt completely devastated. I felt more at home than anywhere in my life. It was a very difficult experience from standpoint of logistics — and prices skyrocketed and the supply of available rentals dwindled to nothing.
“I was fortunate — I had enough time to assimilate what had happened. I started to look around and felt I was in a free-fall. No one likes to move, and that’s true for me. I was dreading it. There was nowhere to go that made perfect sense.
“I do have Realtor friends and others, and I put word out. The things that show up on the MLS are not what I wanted — off island with skyrocketing rents. In the last month, on Oleander Avenue, which is one block long, six people on my half of the block moved out. They were squeezed out because of escalating rents — not like a $200 increase, but $500 and more, so people were scattering.
“I was having lunch with a client who lives in New York but has a condo in West Palm Beach, and I told him. He said, hang on, a friend of his had an apartment that just became available, soon to be put on the MLS. We went to look after lunch. I wouldn’t say it was love at first sight. But it was turn-key. Spacious and light, had a lot of attributes I would hope to find. I imagined I’d be painted into a corner, feeling like I was in an arranged marriage with someone I didn’t want. I did look around.
“It was a week ago today the movers came. I was fortunate. It’s a good fit for me in a building with nice people, run by nice people. And I’m just minutes away from where I was before, just over the North Bridge, convenient for work.
“I got here and I’m paying close to $400 a month less. I could have stayed on the island but I don’t want to work just to pay the rent.”
• LINDA BAKER, an elementary school teacher of kindergartners in Lee County, is a single-salary professional with a big dog:
“I just got my renewal letter for my apartment — the base rent went up $185. I’ve lived in the same apartment complex since I moved down here seven years ago. If I were just moving in, it would be $1,605 to start, up to $1,735. That’s what they’re advertising on the website. I live in the Forum. It’s gated, or at least it’s gated when the gate works. Mine is the smallest apartment you can get, one bedroom and one bath, with 700 and some square feet. With the new rent going into effect in August, I’ll be paying over $1,300.
“I’ve been looking at homes and apartments, searching around here for someone who would accept my big dog, in a place where I wasn’t an hour from work. That’s a hassle, especially when there’s an accident on I-75.”
• VINCE MAROTTA is a Realtor in Palm Beach County:
“My average sale is $6.5 million, and people with that capacity don’t feel like they need to be here. But some clients have lost 25% of what they have recently, and no matter how big a portfolio you have, that’s a huge hit. People have blinders on if they’re thinking wealthy people are not suffering from big drops in the stock market — they are. Their losses can be multiplied.
“So coupled with rising interest rates, inflation, the war and gas prices, blah, blah, people take a pause and assess what they have. Most wealthy people already have a nice place, and it’s just moving up to the next level.
In most communities where I sell, there are very few homes for sale. That’s what’s driving prices. Up until a month ago I was having my best year ever — I had a record in 2021 and I eclipsed that in the first half of 2022. June, July and August are historically my worst times, so we’ll see where we are when we come out of the summer.”
• BILL LEMMERMAN, a state-certified appraiser in North Fort Myers, has been appraising home values for 25 years:
“The last two years have been challenging, to say the least, to stay up with the changes. A lot of those challenges came from cash buyers, in my opinion, paying too much for houses.
“I know agents who told people a house wasn’t worth the price, but they were ready to pay a higher price since a couple years of no taxes after a move from the North would make up their loss, they said.
“But that makes our job harder, to determine what is market value.
“Everybody is guilty of thinking their house is worth more than what it is. Everybody, including me. After the Dodd-Frank Act, fortunately, inquiries about appraisals have to come from the lenders. Agents (or others) aren’t allowed to call us and beat us up anymore.
“I just finished a house I’d appraised in October last year for a little over $500,000, and I appraised it yesterday at $600,000.
“There’s so much data out there — so now we try and use the most recent sales and avoid time adjustments that we apply from the time of the sale — the month between the contract and our appraisal. But if I have to appraise something from six months ago with something like an added pool or guest suite, I’ll apply time adjustments.” ¦