This graph shows different price rebounds in Southwest Florida.

By Jackie Snow

The average single-family home prices rose over 30 percent in Lee County in January compared to January 2011, causing some analysts to claim Southwest Florida is coming back after years of depressed prices.

But this apparent recovery in Lee County is primarily the result of a rebound in its two most upscale communities, suggesting the overall housing market in southwest Florida remains sluggish.

The numbers in Lee County show a dizzying decline from the housing bubble. The median sales price for a single-family home in December 2006 was $325,000. Five years and a mortgage crisis later, it was $107,250.

Sanibel and Captiva, two islands connected to the mainland by a causeway, also had prices drop, from just under a million dollars in 2006 to $850,000 in the first three months of 2011. But prices are now about 90 percent of their all time highs, compared to about 45 percent in Fort Myers and Cape Coral.

John Hermann, president of Herrmann Forecasting, said that the strong and fast bounce back is surprising for Sanibel and Captiva. They were hit by a major hurricane in 2004, followed by the mortgage crisis three years later.

“It was a double whammy on home values,” Hermann said.

The rebound shows the continued popularity of the islands even as buyers remain skittish on the mainland. Obviously, waterfront and island properties will always be in demand and more expensive than other, non-water accessible homes. But while Sanibel and Captiva are the top of the market in Lee County, places like Fort Myers Beach and riverfront properties were comparably priced before the bust.

Michael Frye, owner and agent at Re/Max Realty Group in Fort Myers, said he sees waterfront prices in both Cape Coral and Fort Myers picking up, but not at the rate they sold in earlier years.

“[Waterfront properties] are what attracts people here,” Frye said. “That being said, the amounts of time for those higher end properties sales are still a little slower than we want to see.”

The islands also aren’t nearly as affluent as places like Palm Beach, a similar-sized island on the east coast of Florida where the average home price was about $1.8 million in 2011.

Still, the islands’ home prices are enough to make up for the short sales and foreclosed market that are still prevalent off-island. Take out the 1 percent of sales from Sanibel and Captiva in 2011 and the average home price in Southwest Florida drops by 6 percent.

The crash was felt especially hard here, 2nd in the nation to only the Las Vegas area. Some indicators, in fact, suggest Lee County was, and is, worse off. Over 40 percent of homes are underwater and there are 8,000 backlogged foreclosures in the county, an increase from 6,500 last July.

Sanibel and Captiva were saved in part by policies enacted in the 1970s. At the time, Lee County city planners were responding to the siren song of condominium property taxes and zoned Sanibel to build spaces for up to 90,000 people.

Residents, then numbering only a couple thousands, revolted and incorporated the island to take control back of city planning. The subsequent “Sanibel Plan” put in place strict zoning laws that restricted house sizes and vegetation removal.

Combined with efforts to put as much land as possible into the public trust, two-thirds of the island is protected sanctuary and less than 100 residential lots remain for development. Captiva stayed unincorporated and has some larger homes, but for the most part follows the lead set by its neighbor.

Lynda Traverso, a realtor on Sanibel for the last 25 years, points to the Sanibel plan as stimulating demand for a limited supply of island properties. Besides retirees, a lot of investors are coming back to the rarefied market, she said.

“You can’t rent by the week in Cape Coral,” Traverso said.

Hermann, who has been a visitor to the area for the last 20 years, thinks the Sanibel Plan worked at keeping the island attractive to a specific set that will continue to come, through mortgage crisis or hurricanes’ high water.

“It’s a totally different vibe and attracts a whole different clientele,” Hermann said. “It’s part of the charm of that area.”

Comments are closed.