According to industry reports, the rapid growth in the Southwest Florida market will continue this year too. Just like other housing markets hit by the recession, even Southwest Florida is rapidly recovering. As per the latest statistical report from Land Solutions Inc., home permits are up by 61% in Collier, Charlotte and Lee counties. Mortgage rates have also been quite low, and foreclosure rates are quickly declining. In addition to this, homes in the Naples, FL community of Longshore Lake have posted record sales in recent months.
According to Randy Thibaut, CEO, Land Solutions Inc., Southwest Florida is showing exceptional recovery. He believes that it is been a great year, and the trend will continue in 2014. The Southwest Florida housing market has a very low volume of homes for sale. Moreover, the demand has been increasing. This has been the primary reason for a major increase in prices. Thibaut believes that it leads toward a positive trend. However, there is also some confusion and concern about the housing market in 2014.
What’s the Confusion About?
According to Thibaut, the same trends were noticed between 2003 and 2005. While people have been experiencing positive results, and everyone’s once again busy with their lives, it is very important to focus on one factor – Is this too good to be true? Thibaut wonders if the city’s in another run up of the previous recession and housing bubble. He wonders if these results are sustainable.
In the minds of people, the last recession and housing bubble cycle is quite fresh. Thibaut believes that the memory could be a good thing. He thinks people will be making smarter choices this time. This year, industry experts are worried what would happen if housing prices continue to rise. About two years ago, a home that was up for sale went for just $250,000 is now worth more than $300,000. Land prices, cost of materials, and profit margins are going up rapidly.
Since builders are making more profits, they find it easier to knock off many buyers. This might add to the interest rates. When prices escalate high, it becomes important to chunk off a big segment of the housing market. Sustainability in the local housing market is not the only concern. Even the construction industry has been facing a major workforce shortage. Builders have been competing hard, and even stealing each others’ subcontractors.
According to Mike Timmerman, Economic Analyst, Fishkind and Associates, the workforce shortage has been caused because a major portion of the laborers decided to move to the center regions of the country. Some of these include Oklahoma, North Dakota and Texas.
All these are energy producing states. These people have been working in markets that are more stable and reliable. They are skeptical about moving back to Florida and take a risk. A steady, good income is holding them back in these energy producing states.
It is worth mentioning that Florida has been noticing a tremendous growth in the housing market. However, 8 out of 10 major cities with highest foreclosure rates are still in Florida. With such information, you can not overlook Thibaut’s concerns about sustainability. This time around, people need to be careful and make smarter choices.