SWFL sets new real estate marks, but fewer can afford

August 24th, 2021

By Phil Fernandez - In the Know Naples Daily News


Nearly every community in the country saw a rise in median sale prices over the last year. And 94% of metro areas had double-digit price gains.  Then there’s the best of the best: A dozen metros led the nation with more than a 30% jump, according to new National Association of Realtors second quarter data as compared to the same period in 2020.  Three of those are from the Sunshine State, and all of them can be found right here in Southwest Florida.  Collier County finished third in the nation with a 42% surge, behind the 47% of Pittsfield, Mass., at the New York border near Albany and 45% of the Austin, Texas, area. Lee County checked in at 8th with 36%, and put Charlotte County down at No. 12 with 31% .

“Home price gains and the accompanying housing wealth accumulation have been spectacular over the past year,” said Lawrence Yun, NAR chief economist.  That also has put Naples in elite company with the San Diegos, Bostons, Honolulus, Portlands and Seattles of the world: As one of the 17 metro areas where a family needed more than $100,000 to affordably pay a 10% down payment mortgage. NAR metrics considers a mortgage affordable if the payment amounts to no more than 25% of the family’s income.  And that’s not good for those finding home ownership getting further and further out of reach. In the Know has reported on affordability in the past, and the topic emerged again locally this past week, according to my esteemed colleague Omar Rodríguez Ortiz.

Naples Planning Director Erica Martin said her department was unable to hire a high qualified candidate for a senior position because the applicant was unable to find a home that the aspirant could afford.  “Housing affordability for first-time buyers is weakening,” Yun said. “Unfortunately, the benefits of historically low interest rates are overwhelmed by home prices rising too fast, thereby requiring a higher income in order to become a homeowner. (Housing) supply will be critical in moderating the growing housing costs and rising rents.”  Among first-time buyers, the mortgage payment on a 10% down payment loan rocketed to 25% of income, as compared to 21% a year ago.

Among all homebuyers, the monthly mortgage payment as a share of the median family income rose to17%in the second quarter, as compared to 14% in the second quarter of 2020.  With home prices escalating, the monthly mortgage payment on an existing single-family home financed with a 30-year fixed-rate loan and 20% down payment rose to $1,215.  This is an increase of $196 from one year ago, despite the drop in mortgage rates.  The most affordable markets – where a family can typically afford to buy a home financed with a 10% down payment with an income of $25,000 or less – are in the Rust Belt areas of Youngstown-Warren Boardman, Ohio ($24,401); Peoria, Illinois ($24,013); Cumberland, Maryland ($23,773); and Decatur, Illinois ($21,481).

Repercussions of Florida’s sickly status

As it turns out, all those states might now have another draw: They also happened to have significantly lower coronavirus hospitalization rates than Florida, which has the highest by far, not to mention easily the most nationally, based on the latest this past week by the New York Times and WalletHub financial advisors.  Yun notes that home prices are increasing sharply in the New York and San Francisco metro areas, which early in the pandemic had seen residents fleeing the cramped quarters of the cities to the more open wide spaces that exploded Florida’s market.  While for Collier it was about a $200,000 jump, the San Francisco metro saw a $315,000 rise in median prices as compared to a year ago, the highest in the nation.


Reports are that folks have been moving back to these metropolises, and that’s happening as Florida dons the hotspot COVID-19 crown, which at one point had belonged to New York.  Just as having that sickly status had repercussions for the Empire State early last year, this could also spell economic problems now for the Peninsula and deaden the real estate market.  “The fact that there are record CO-VID 19 hospitalization numbers,” WalletHub analyst Jill Gonzalez said, “is bad news for the economy. Hospitalizations and deaths are the most important metrics for measuring the danger of the CO-VID 19 pandemic.”


Gov. Ron DeSantis was in Bonita Springs Friday at one of his stops promoting the Regeneron treatment considered a temporary protection against COVID. DeSantis – viewed as a GOP presidential contender in 2024 – has dismissed hospital capacity concerns as “media hysteria,” despite real-life experiences of families, doctors, nurses and administrators.  “Many Florida hospitals are stretched to their absolute limits,” Florida Hospital Association CEO Mary C. Mayhew said Tuesday. “While hospitalizations continue to increase, three out of four Florida hospitals expect to face critical staff shortages in the next seven days, an increase of nearly 10% since last week, and half of our hospitals will no longer accept transfer patients from other facilities.”

On Thursday, as an example, the intensive care units for NCH Healthcare System, which operates Collier’s largest hospitals, were at 136% of capacity and rising.  Gonzalez worries that if leaders don’t get soaring hospitalizations under control, “this will dampen our economic recovery and reduce consumer confidence,” she said. “What really impacts the economy is the share of people with COVID-19 who experience severe illness or die.”  That’s a major reason many merchants are exerting their private property rights and trying to keep their employees and others safe and businesses growing by wanting certain policies such as masking and vaccine requirements.  In a nation split straight down the middle on numerous issues, this is not one of them for Floridians. Results released Wednesday by the Florida Atlantic University Business and Economics Polling Initiative spell it out.  Only 7% said they were not at all concerned about the rapidly spreading Delta variant.

Proof of vaccination measures

“As the number of COVID-19 cases in Florida increases, the majority of Floridians support COVID-19 requirements,” said Professor Monica Escaleras, director of FAU BEPI in the College of Business.  For instance, a vast majority of Florida residents support requiring proof of vaccination for:

h cruise ship passengers, 70%;

h airline passengers, 68%;

h and fans at sporting and entertainment events, 61%.

For dine-in customers of restaurants, it’s a 13-point spread, 53% support while 40% oppose. At the same time, 65% favor businesses insisting that employees get the vaccine, while 30% oppose, and 5% aren’t sure. When it comes to whether universities should require students to be vaccinated, 67% were in favor.  And masks?

That’s 66% agreeing with the recommendation by the Centers for Disease Control and Prevention that students, staff and teachers wear masks in public schools.  In one of the latest blows to the governor, a judge ruled two weeks ago that, bottom line, government doesn’t have a right to stop cruise lines from protecting the safety of their passengers. And on Thursday, a court rejected the DeSantis move to sweep away a suit challenging his authority to stop school districts from enforcing mask mandates.  DeSantis won’t detail to the public how much in legal fees his many court battles are costing taxpayers on these and other issues.  But Forbes magazine has estimated he may end up costing the state’s economy billions, with his position on prohibiting businesses from asking those they serve on their properties to provide proof of vaccination.

The cruise industry alone has a value of $8 billion a year to Florida, according to the Cruise Lines International Association. Looking ahead, vaccinations and residents feeling safe are key to the economy, Gonzalez said. “The safety level of the country impacts the economy,” she said. “It determines how confident people are to go out and spend money.” And regardless of a virus, they were already becoming less likely to spend money on homes in 2022 as they have more recently. Yun said he didn’t expect the median price trend to continue into next year.  “There are signs of more supply reaching the market and some tapering of demand,” he said. “The housing market looks to move from ‘super-hot’ to ‘warm’ with markedly slower price gains.”

Top dozen includes 3 SWFL counties

Top 12 metro areas with highest second- quarter median gains as compared to a year ago: 1. Pittsfield, Mass. (46.5%); 2. Austin-Round Rock, Texas (45.1%); 3. Naples-Immokalee-Marco Island (41.9%); 4. Boise City-Nampa, Idaho (41%); 5. Barnstable, Mass. (37.8%); 6. Boulder, Colo. (37.7%); 7. Bridgeport-Stamford-Norwalk, Conn. (37.1%); 8. Cape Coral-Fort Myers (35.6%); 9. Tucson, Ariz. (32.6%); 10. New York-Jersey City-White Plains, N.Y.-N.J. (32.5%); 11. San Francisco-Oakland-Hayward, Calif. (31.9%); 12. Punta Gorda (30.8%).


NAR metrics: Less affordable Collier

In the second quarter, the 16 metro areas besides Collier County where a family needed more than $100,000 to affordably pay a 10% down payment mortgage were:

  • California (San Jose-Sunnyvale-Santa Clara, San Francisco-Oakland-Hayward, Anaheim-Santa Ana-Irvine, San Diego-Carlsbad, Los Angeles-Long Beach-Glendale);
  • Hawaii (Urban Honolulu);
  • Colorado (Boulder, Denver-Aurora);
  • Connecticut (Bridgeport-Stamford- Norwalk);
  • New York (Nassau, New York-Newark- Jersey City);
  • Massachusetts (Boston, Barnstable);
  • Washington (Seattle-Tacoma-Bellevue); h Oregon-Washington (Portland-Vancouver-Hillsboro); and
  • D.C.-Virginia-Maryland-West Virginia (Washington-Arlington-Alexandria).