Coastal construction falls to decade-lows while Hendry soars.
As 2024 came to a close, Collier County house construction reached its lowest level in ten years, while Southwest Florida experienced a general decline, reflecting “notable shifts” in the housing market, as reported by researchers at Florida Gulf Coast University.
Recent data from FGCU’s Regional Economic Research Institute revealed that both Collier and Lee counties have experienced a decline of approximately 10% in the construction of single-family homes compared to the previous year.
Here’s what you need to know about that and the new developments that began emerging in the initial busy days of 2025, according to a recent article by Phil Fernandez of Naples Daily News.
Collier is on track to issue the lowest number of annual housing permits since 2014.
According to FGCU statistics, Southwest Florida has reached its lowest level of new construction since the beginning of the decade, with a few exceptions: The period immediately following the devastation caused by Hurricane Ian and the onset of the pandemic, during which economic activity was nearly halted across Collier, Lee, Charlotte, Hendry, and Glades counties.
For Collier, the decline is notably more severe, with the lowest points dipping even below those seen during the pandemic and Ian periods. The Naples region has predominantly experienced a decline since the summer months. In September, the 145 permits recorded marked the lowest figure since November 2014. With December’s numbers yet to be finalized, Collier was already on track to achieve its lowest annual totals since 2014. October concluded with 200, while November wrapped up at 160. In contrast, May 2021 recorded 489, marking the peak of the decade.
Insurance amidst challenges ‘decreasing local demand’ for homes
Three hurricanes in three years have inflicted significant damage on Southwest Florida, making insurance a critical issue, which is contributing to the “reduction in local demand,” according to the research. That also contributes to the decline in existing home sales, which fell by 11% in November compared to the same month last year. In contrast, home sales saw a national increase of 7%.
As we have discussed in recent days and months, the challenges extend far beyond that.
A household of three requires $102,000 in 2024 to reside in Collier.
Affordability remains a challenge in Southwest Florida, where the U.S. Census indicates that over a third of children reside in single-parent households. In 2024, a family of three with two children required over $102,000 to sustain a living in Collier, as indicated by an MIT study. In Lee, the amount exceeds $94,000.
However, the findings from MIT indicate that many salaries fall significantly short. In Southwest Florida, the average yearly compensation for various in-demand sectors is approximately $60,000 in education, $47,000 in construction, and $38,000 in healthcare support.
‘The economy of Southwest Florida is exhibiting certain indications of decline’
According to last week’s FGCU January 2025 economic indicators report, “Southwest Florida’s economy showed some signs of weakening,” as it noted that consumer spending had declined year-to-year for 11 consecutive months in the most recent figures through August.
These are the taxable sale figures gathered before hurricanes Helene and Milton, which had additional effects on the area, including Fort Myers Beach and Sanibel, both of which have been in the process of rebuilding since Ian in 2022: The report concluded, “Recovery efforts in these areas may be hindered by the recent hurricanes.”
As coastal areas experience a decline, house construction in Hendry County is on the rise.
In addition to its various negative impacts, that tropical weather is influencing some homeowners to relocate inland, away from the beach, as we have reported.
In contrast to coastal counties, Hendry County, which is part of the Unbuilt Triangle we initially reported on in 2024, experienced a 23% rise in house permits in November compared to the previous year.
The concept of a gated community was introduced this weekend in LaBelle.
Affordability is a key factor in LaBelle, where Caloosa Cove recently unveiled models for its 40-acre gated community featuring 137 single-family homes located off Ben Moore Road and State Road 80. Centex Homes, described by PulteGroup as its “national affordable homebuilder,” has set the starting price at nearly $290,000, which is below the median prices in both Lee and Collier, offering square footage ranging from 1,256 to 2,203.
“Caloosa Cove offers significant value in the market,” stated Josh Graeve, Southwest Florida division president for PulteGroup. “The allure of Labelle, paired with the prime location and exceptional value at Caloosa Cove, is generating significant enthusiasm and interest from families as well as empty nester buyers.”
Inland construction is at the forefront in SWFL, with Babcock leading the charge.
The shift towards the east in Southwest Florida is exemplified by Babcock Ranch, located at the Lee-Charlotte line, where nearly 800 homes were sold in 2024. This achievement positioned the master-planned community 11th in the nation for sales, as reported by RCLCO consulting and other tracking sources. That figure has decreased from approximately 950 in 2023, when the 4,000-home enclave garnered international attention following Ian’s aftermath, emerging from the violent hurricane largely unscathed.
Following the recent events of Helene and Milton, which resulted in similar impacts without any power outages, organizations like the New York Times, Forbes, and the U.K.’s Daily Mail praised the concept of a “climate-resistant community.” A publication with a focus on Chinese matters also contributed to the discussion. Simultaneously, a duo of environmental professors from the University of Washington highlighted it in their report as the U.S. model for what others should adopt regarding infrastructure, akin to practices observed in Europe.
Babcock Ranch is experiencing ongoing growth with the addition of more shops and dining options.
Babcock has been enhancing its shopping and dining options with the upcoming mid-year opening of its fully leased 125,000-square-foot “Yellow Pine” center, alongside efforts on a third retail phase. Additionally, it has introduced recreational amenities, including a sports complex that was launched over the holidays.
“As you observe the town, you’ll notice the development of new parks and various facilities designed for outdoor enjoyment and, most importantly, fostering community,” stated founder Syd Kitson. “We take immense pride not only in the physical aspects of Babcock but also in Babcock Ranch and its community, as that truly defines its uniqueness.”
Following the ‘extreme 2024 season,’ Ave Maria promotes its ‘hurricane-safe’ features.
Similar to Babcock, the 5,000-home Ave Maria in east Collier earned a spot on the RCLCO 2024 list by selling 600 homes, a decrease from approximately 650, and positioned itself just outside the Top 20. It promotes itself as a “hurricane-safe community” that sustained no damage during the severe 2024 season. Proponents argue that the 20-year-old community is located 20 miles from the shore and is typically more affordable than other areas in Collier.
“Ian and Milton primarily affected coastal or low-lying regions, or areas that were constructed some time ago, or were built with materials of a lower standard,” stated Graeve, whose PulteGroup operates in the Collier town. “In Ave Maria, every Pulte home is constructed to withstand winds of up to 160 miles per hour, and each residence is elevated by at least a foot above the base flood elevation as established by FEMA and Collier County.”
Located in Fort Myers Alico transitions from citrus cultivation to inland development.
The future opportunities for inland development arise from the remarkable decision made by one of Florida’s largest citrus producers to cease operations this year, as reported by my colleague Laura Layden.
Fort Myers-based Alico is changing its agricultural focus and intends to explore residential and commercial opportunities on approximately 25% of the over 53,370 acres of land it possesses.
Seagate is constructing $2M homes in a new community, situated away from the beach.
Additionally, there are other new inland development plans that have surfaced this past week. Seagate Development commenced construction on Thursday for the 51-site Opus Stone community, located 10 miles from the Collier coast along Vanderbilt Beach Road, with homes priced starting at a minimum of $2 million.
A $9 million deal orchestrated by Cushman & Wakefield | Commercial Property Southwest Florida initiates the transformation of office space at 12600 Gateway into 256 apartments, situated over 15 miles from the Lee coast.
However, coastal real estate is far from being entirely inactive.
Wendover Housing Partners has obtained a $20 million local grant for the Helm’s Bay Landing project, previously known as the former Sanibel Outlets, which we reported on last year. The 200 units designated for workforce housing will be integrated into the Calusa Grande mixed-use development located near Summerlin Road and McGregor Boulevard, serving as a replacement for the disarray left by Ian at the shopping center.
The priciest homes sold in Lee and Collier counties in December were located close to the beach. A mansion in Captiva has been sold for $10 million. In Naples, 275 Bahia Court was purchased for $9.1 million, located approximately half a mile north of the newly established $5 million clubhouse at the Moorings Golf & Country Club, which was founded in 1963. The latter is one of many projects throughout the region that I examined more closely in 2024.
This article originally appeared on Naples Daily News