WILL HURRICANE IAN HAVE A POSITIVE IMPACT ON COMMUNITIES IN EASTERN COLLIER COUNTY?
Eastern Collier County came through Hurricane Ian relatively unscathed compared to harder-hit areas to the west. There are early reports that some coastal residents headed east to rent or buy at least temporary shelter in the storm’s aftermath.
So, how would a migration east affect the market?
“We have heard of people whose houses were damaged by the storm surge west of U.S. 41 temporarily renting or possibly even buying property east of 41 until their property was fixed up,” says Mike Hughes, vice president and general manager of Downing-Frye Realty. “I don’t know that I could say it’s been a huge windfall. It’s helped but I can’t tell you to what extent.”
So far, Shannon Lefevre, a REALTOR® with John R. Wood Properties, hasn’t seen an exodus from the coast. “I feel like Pelican Bay, Park Shore, Moorings, Coquina Sands, Port Royal— there’s an attraction to those areas for a reason,” she says.
Perhaps the most pressure was put on the rental market by coastal refugees, Lee County residents seeking shelter, and all types of workers “who flooded into the area and needed a place to stay,” notes Hughes. And for some trades, “there’s enough work for the next year or two.”
From August through mid-February, Zillow statistics show, the median monthly rent for all homes in the East Naples ZIP code 34120 had increased 25 percent, from $4,400 to $5,500, similar to the increase in East Naples ZIP code 34119: from $3,800 to $4,500. By contrast, the median monthly rent for all homes in the Naples Beach ZIP code 34112 increased 20 percent, from $3,200 to $3,875 in the same period.
MARKET SNAPSHOT
According to the Naples Area Board of REALTORS® (NABOR®) December 2022 Market Report, the number of both new listings and total sales in East Naples decreased from the previous December—consistent with a countywide trend. Nonetheless, year-to-date inventory rose more than 85 percent from 2021.
At the same time, the price of both single-family homes and condos in East Naples rose. The median closed price of single-family residences in December was $575,000 (up from $515,000 in 2021) and the average closed price rose 6.6 percent to $672,463. At the same time, condos in East Naples experienced even higher increases with a median closed price of $530,497 (compared to $410,000 in December 2021) and average closed price of $540,228—up 19.5 percent from December 2021’s $452,024 average.
While the prices are climbing, median closed and average closed prices in East Naples for single-family homes and condos are among the lowest in the county—only coming in higher than the Immokalee/Ave Maria market, according to the December 2022 Market Report. In addition to East Naples’ impressive inventory increase, Ave Maria on the county’s eastern edge had Collier’s highest year-over-year increase in inventory—up 207.7 percent, according to the December Market Report. Meanwhile, the median closed price there rose only 6.4 percent to $415,000.
East Naples looks like a good buy compared to the countywide average of $1.44 million. Adam Vellano, Naples sales manager at Compass Florida, says rising prices throughout Collier County certainly won’t scare out-of-state customers.
“We’re largely considered affordable if you talk to the people who are buying here.,” Vellano says. “When we deal with people from New York or California or Chicago, when they come here, they laugh at our prices…a 700-square-foot apartment in Manhattan can be $6,000 a month.”
Eventually, Vellano says, “I think what you’ll start to see is everything filling in between us and Ave Maria. Driving out to Ave Maria isn’t going to look like it looks now. It’s going to look more like what you see in town.”
HOUSING EXPANSION MOVING FROM WEST TO EAST
William Dukes, senior mortgage loan officer of Naples-based Summit Mortgage Corp., says geography isn’t always destiny when it comes to water damage and distance from the Gulf of Mexico. Communities relatively far from the gulf are also vulnerable to flooding due to canals and stormwater ponds that can be overwhelmed during the rainy season and in storms, Dukes says, and because some older neighborhoods are low-lying.
Dukes lives in Imperial Golf Estates, well east of U.S. 41 and more than two miles from the gulf, but a small canal runs through the community. “When Ian hit, our guard gate ended up four feet under,” he says. “And the water rose about an inch and a half high on my garage door.”
Vellano has seen a shift east. “We’ve seen a lot of people who lived on the beach and might have had damaged properties purchase east because they want to have a place in Naples,” he says. “We’ve seen a huge uptick of people buying from west of 41 to east of 41.”
Today’s real estate market is taking place in the shadow of an earlier boom in sales caused by a rush to Naples by people fleeing COVID-19 restrictions after the pandemic struck in early 2020, Vellano says. That resulted in a sharp drawing down of inventory. In December 2019, there were 5,400 homes for sale. “We probably got down in the height of the market to about 850 doors [housing units],” Vellano says. “We’re currently at about 2,400 doors and we haven’t seen prices really come down.”
The pre-COVID numbers showed “a good market,” Vellano says, but it won’t return overnight. “There’s not enough new construction. New construction slowed down after the bubble in 2008 and 2009 and it never really got back to peak performance and you have a national housing inventory problem. So, it’s everywhere—not just us.”
Meanwhile, says Wes Kunkle, president/broker of Kunkle Realty, shifts eastward won’t leave a vacuum in western communities that experienced heavy storm damage. However, it will take time to expand inventory throughout the county because of home repairs and replacements and lingering construction issues. Many builders “have so much work they’re not taking any more on,” Kunkle says.
In flooded areas, it will take a while to replace damaged
homes. Many are so badly damaged; it doesn’t make economic sense to do anything
but tear them down and start over again. These properties are being listed for
“land value,” Kunkle says.
There’s room to grow in the eastern part of the county, but
it’s facing the same shortage of contractors, he says. “In Ave Maria, there’s a
lot of new construction but it’s taking 18 months to two years to build. Some
people will wait for two years.”
Hughes says rebuilding in the west and new construction to
the east will continue but it’s too soon to gauge the pace and location of the
work because the choices are deeply personal. “People generally have a short
memory. When you think about previous hurricanes— Wilma, Charley, Irma—people
remember the name, they remember the storm, but they have a short memory of the
horrific pictures,” he says. “The people who will have a memory are those who
stayed through that storm and went through it.”
Those who lived through Hurricane Ian’s historic detestation
are contemplating their next step. Some don’t want to risk being flooded again,
while others believe Hurricane Ian was a rare one-off because Naples hadn’t
experienced that scale of surge since Hurricane Donna came ashore in 1960.
Hughes notes that “some people might say, ‘If you play the numbers, I’m not
going to be here in 62 years.’ Others might say, ‘You know, I’m just not going
to go through that again and I’m going to get a little further away from the
water.’ And I’ve heard a bit of both to be honest.”
