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What's driving the housing market in Southwest Florida?

CEO Khai Intela
Sticking with the greatest hits of the 2020s, apartments continue to be the hottest sellers in Southwest Florida. As reported this month, multifamily properties topped the list for commercial sales in both Collier and Lee...

Sticking with the greatest hits of the 2020s, apartments continue to be the hottest sellers in Southwest Florida. As reported this month, multifamily properties topped the list for commercial sales in both Collier and Lee counties in 2023. From a luxurious $125 million compound in Naples to a $78.8 million property adjacent to Estero's Hertz Arena, apartments are making waves in the real estate market. Let's dive deeper into what's fueling this trend and how it compares in these two counties.

What's helping drive housing investment in Southwest Florida?

Several factors contribute to the booming housing market in Southwest Florida. One of these factors is the influx of southbound Baby Boomers who are looking to invest in properties in the area. Additionally, telecommuting executives, some of whom have opened offices in Naples, are also choosing to reside in luxury apartments and other housing options. The COVID-19 pandemic served as a catalyst for this trend, with many people relocating to the state during the early stages of the pandemic. Stephen Bittel, founder of Terranova, one of Florida's largest commercial real estate firms, highlighted this phenomenon, stating, "We saw a huge volume of relocations early in the pandemic. We're starting to see a second wave of their executives."

This housing investment trend mirrors the growing popularity of golf course communities in the area. Seasonal residents who chose to stay in Southwest Florida during the pandemic were enticed by the region's outdoor options, including golf courses. As the threat of the virus subsided, many of these residents decided to make Southwest Florida their permanent home, further driving migration and real estate demand.

Hottest Seller in Southwest Florida Image Source: saigonintela.vn

Where does Southwest Florida's percentage of new apartments rank in the U.S.?

Southwest Florida is among the top 20 markets for apartments in 2023, according to RentCafe researchers. With an occupancy rate of 94%, the region boasts a solid lease renewal rate of 65%, placing it among the highest in the nation. Landlords in Southwest Florida understand the value of retaining tenants in the current economic climate, as the cost of seeking replacements or dealing with vacancies can be substantial.

Moreover, landlords are becoming increasingly aware that tenants have options and may choose to move to other properties with better amenities or conditions. As a result, Southwest Florida leads the nation in the percentage of overall apartment supply built in the past year, with more than 5% of the region's apartments being newly constructed.

What were some of the top apartment deals in Southwest Florida in 2023?

Apart from the high-profile Naples Pearl Founders Square Apartments and the Waterline Estero Apartments, there were several notable multifamily property sales in both Collier and Lee counties.

In Collier County, Naples 701 Apartments on Plantation Way near Bayshore Drive sold for $30.2 million. Additionally, Aqua Bay Apartments off Collier and Green Boulevards were purchased for $26.5 million, and Bear Creek Apartments near Airport-Pulling Road and Orange Blossom Drive sold for $22 million.

In Lee County, the North Fort Myers River Estates, listed as multifamily in CoStar Group data, was sold for $17.7 million. This property includes manufactured housing. Another notable deal was the $17.1 million transaction at 10131 Estero Town Commons off Corkscrew Road, which involves a retail plaza with 33,773 square feet of space spread across four buildings. Stock Development is redeveloping 42 acres in total for this project and has plans to build a 306-unit apartment complex behind the retail parcel.

It's clear that apartments are not only the hottest sellers in Southwest Florida but also a significant driving force behind the region's real estate market. With factors such as the influx of Baby Boomers, telecommuting executives, and the appeal of Southwest Florida's outdoor options, the demand for multifamily properties continues to soar. Southwest Florida remains a promising market for both investors and tenants alike.

Image Source: saigonintela.vn