Southwest Florida Real Estate Market Growth Too Rapid and Unsustainable

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New Analysis of Florida Real Estate Information from The Fund’s Real Estate Index

This exponential growth is too rapid when compared to the population growth in the area that only increased by 9.7 percent in the last two years. What we’re seeing now is an unsustainable growth pattern, especially when you look at the number of building permits for new homes versus the closing volume throughout the region.

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Dr. Hank Fishkind, one of Florida's premier economic consultants, said today that the exponential growth in the residential southwest Florida real estate market is too rapid and will not be sustainable when compared to the population growth.

“Over the past year we have seen an explosion of activity for new residential building permits,” said Dr. Fishkind, principal of Fishkind & Associates. “This exponential growth is too rapid when compared to the population growth in the area that only increased by 9.7 percent in the last two years. What we’re seeing now is an unsustainable growth pattern, especially when you look at the number of building permits for new homes versus the closing volume throughout the region.”

Data from which Fishkind draws these conclusions is derived from The Fund’s Real Estate Index, based off of Attorneys’ Title Insurance Fund’s (The Fund) extensive online deed data system. The Index analyzes home sales values and volume for single-family homes, condos and timeshares throughout most regions in the state. The Fund’s Real Estate Index provides Florida real estate information to the public through the Southwest Florida Real Estate Council’s Web site swrec.com. The real estate council – a member organization comprised of local real estate attorneys in Charlotte, Collier, DeSoto, Hendry and Lee Counties – has set up a Web site to offer critical Florida real estate information and data to consumers and real estate professionals on a regional level.

According to the Index data, the closing volume in November for new single-family homes increased to 587 units, up from 566 units in October. While data from the Lee County Economic Development Office showed that single-family building permits in November dropped to 1,104, down from 1,408 permits in October – revealing an 88 percent difference between the closing volume of new single-family homes and building permits in November and a 217 percent difference in October.

This pattern in the Index is repeated across almost every single market in southwest Florida. For instance, November closing volumes for new homes in Charlotte and Collier Counties dipped to 11 units and 159 units respectively, down from 14 units and 195 units in October, continuing to show declining closing volumes and the cooling down of the market.

The recently launched real estate council Web site includes the monthly Real Estate Index; upcoming real estate events, such as homebuyer seminars; pertinent Florida real estate market information, including school districts, government listings and local real estate associations; recent local real estate news and articles; and a list of local real estate attorneys. All data on the Web sites is available at no cost to visitors and can be found at swrec.com.

About The Fund:

Founded in 1948, Attorneys’ Title Insurance Fund, Inc., Florida’s leading title insurance underwriter and title information provider, is in business to preserve and facilitate the real estate practices of its members in their protection of the public. For more information, visit thefund.com.

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