Several Condo Projects put on hold
The future is in question for at least a dozen new condo projects that were originally proposed to be developed east of Interstate 95 in the tricounty South Florida region since this current real estate cycle began in 2011. A growingly bearish sentiment for South Florida’s previously booming preconstruction condo market has emerged since the last winter tourism season ended and prospective domestic buyers returned north for the summer. In their absence, developers are dealing with international investors who increasingly find themselves priced out of the South Florida condo market as preconstruction prices have surged to reflect higher construction costs and foreign currencies have fallen against the U.S. dollar as the global economy has slowed.
This doesn’t surprise me. Unlike the Fort Myers/Naples market that is growing with what I call “REAL” buyers (buyers that are actually going to live in the homes they buy), Miami is being bought up by foreigners. Make no mistake, the city is thriving and will continue to grow with these investors. But as a retirement destination? Only for the well heeled.
Back in 2004-2006 we saw many of these buyers from Miami seeking deals on the west coast of Florida – and we are stating to see them again with the deal we have here at Oasis, and other below replacement costs projects.
Retirees and second home buyers, however, are mostly priced out of the Miami market. Baby Boomers are looking to stretch their retirement dollars and looking for that retirement calculator that will tell them they have enough money to retire. The cost of living in Miami will bust most of those retirement calculators as prices of condos soar from twice to FIVE times that of West Coast new construction prices.
The cost to go vertical in Fort Myers as well as the rest of Southwest Florida is about $225/sf, add land and soft costs and developers need to plan on spending close to $300/sf. But you can still buy here well under that number. To me this is a buy signal.
Looking to invest in Southwest Florida (perhaps for your future retirement?)
I like these options:
- Buy new construction in a gated community that has room to build many more units.
- Buy a home that will rent well on VRBO – a home with a pool, with enough room for two couples to vacation comfortably.
- Buy river or water front condos like Oasis at below replacement costs.
- Build a home where infrastructure already exists.
- Buy a home built since 2006 near town.