SW Florida Building Permits Slowed From Record Levels in 2005. Permit activity in the SW Florida real estate market was off compared to record 2005 levels. Builders are less likely to pull permits for speculation construction with the amount of resale inventory on the market, and investors looking to flip for a quick buck have dried up. That leaves builders with the normal buyer contracts, and even that has slowed from 2005 levels.
In 2005 buyers bought new construction at record levels for a few reasons. First, because there was a severe shortage of homes on the market, and new construction was Plan B and served as backup inventory. Secondly, investors liked buying at pre-construction prices, and the building process gave them time to find a buyer for that home so they could make a nice profit without hopefully ever having to own the home. Investors serve as financiers so to speak and helped speed up supply.
Demand from end users never changed very much. We had artificial demand which the investors created, which made the market appear much better than it really was. While we had artificial demand, we now have Real Supply. When you mix Real supply with Normal demand, you have a Buyers Market.
Buyers are in the driver’s seat, no question. The only question is the speed at which they are driving, and how long it will last. We are starting to see signs of increased buyer activity. This is welcomed news for many. Many buyers were sitting on the sideline waiting for somebody to give the “All Clear, it’s OK to buy now signal.”
Many buyers have heard the signal and are stepping back in. The market may not be All Clear in all segments; however we are seeing very nice activity in certain segments.
Mixed Messages: Many buyers think when they hear the words “Buyer’s Market” that they own the road. Buyers still need to be aware that many properties are pried very well. Those sellers are successful at selling in this market. It’s not like we don’t have any buyers, we certainly do. We have normal buyer activity just like we’ve always had. Because the best properties always sell, buyers are not in competition with the seller for those properties. Buyers are in competition with other buyers who will scoop up the property and steal it from them.
So, if you’re a buyer and see a property you like and is priced well, don’t sit too long. The best values are selling, and you’ll be on your 2nd, 3rd, or 4th choice before you know it. The only good news is that if you can live with your 2nd -4th choice, they are there for you this year. Last year you didn’t have a 4th choice.