Market Neither Boom Nor Bust

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Southwest Florida experienced an unfamiliar new type of real estate market in 2013: a relatively normal one.

But that doesn’t mean the market’s immune from forces that could push it into either boom or bust.

Those were the conclusions of three real estate authorities who presented their takes on the year Tuesday night at The News-Press Market Watch: Focus on Real Estate.

Speaking before a sold-out crowd of about 900 at Harborside Event Center in downtown Fort Myers, presenter Randy Thibaut of Land Solutions said it’s important to look at what’s actually happening now, not the giddy feelings people have now the recession’s fading.

“There’s a lot of myth, a lot of boom, all kinds of things going on in the market. So I’m going to focus in on the facts,” said Thibaut, who specializes in sales and development of large tracts of land.

Southwest Florida’s real estate market has had “the frat party and the hangover” in the wild swings of the past 14 years, and now it’s moving into a new phase, presenter Denny Grimes of Denny Grimes & Co. and Royal Shell Real Estate told the crowd.

Now, he said, nine years after the boom ended, the area’s real estate market has returned to something approaching normal, and that’s a good thing.

“You generally don’t get that opportunity this soon” after a meteoric rise followed by a violent contraction, Grimes said.

There’s little likelihood the recovery will turn into a bubble of unwarranted speculation, Grimes said. “We would need four years of 20 percent increases to get to peak value. We are nowhere near a bubble.”

The retiring baby boom generation will fuel future growth, he said, because this area is an attractive retirement venue. “We offer water, warmth and way of life.”

Grimes predicted a sustainable real estate industry is on the horizon, saying that “2014 will usher in a rational boom” for at least five years.

But the presenters didn’t sugar coat the problems still lingering from the recession.

Financing, for example, is still hard to get from lenders who were burned by the sharp drop in values that followed the boom, said presenter Stan Stouder, a founding partner of CRE Consultants who handles commercial property sales and leasing.

“Why do they call it funding?” Stouder cracked. “There’s nothing fun about getting a loan today. They want you to guarantee every deal 100 percent.”

The deals that were made in Lee County in 2013 by and large were done without a lender’s help, he said. “Sixty-five percent of the commercial real estate deals had no financing at all.”

Thibaut noted that labor costs are rising because of an acute shortage of skilled tradesmen. Many qualified workers moved away after building slowed to a crawl after the boom ended.

“We’ve got to do something” to lure them back at a faster pace, he said.

But there are limits to the most careful planning and predicting, Thibaut said. “Predicting the future of where our home building industry’s going to go is like predicting where a hurricane’s going to go.”