Uncertainty was the word of the day as three real estate experts, backed by facts, shared their reflections and predictions on the market at The News-Press Market Watch.

The annual event, this time titled “Real Estate Solutions for Uncertain Times,” was held Wednesday evening at Harborside Event Center in Fort Myers.

Presenters included Randy Thibaut, owner and founder of Land Solutions, who discussed land and new home sales; Denny Grimes, president of Denny Grimes & Company, who focused on existing home sales; and Stan Stouder, founding partner of CRE Consultants, who dealt with commercial real estate.

Randy Thibaut, CEO, Land Solutions Inc.

“Welcome to Uncertainty 2016,” Thibaut said. “That’s the theme of my presentation. That’s where the meat of the market is. That’s what we’re feeling.”

Thibaut referred to surveys that show people held differing views of where the market was in 2015 and 2016. Some thought it was in a boom, others in a bubble, but most didn’t know.

“No one had a good feeling on where they thought the market was,” he said.

Thibaut discussed the luxury high-rise market from south to north, mentioning three projects in south Naples that are selling well.

“For 10 years there were no towers built,” he said. “There was pent-up demand for buyers who wanted that luxury project. It was clear there was hunger for luxury product in Naples. We think they’ll sell out.”

Builders are working on luxury projects in Estero/Bonita Springs and Fort Myers Beach as well. Things start to get more uncertain when looking at downtown Fort Myers, he said, where a number of builders are working to pre-sell units.

“They’ve been churning along trying to get enough reservations … but it’s been a much slower go than what we’ve seen in Estero and Naples,” he said. “When you start thinking about 550 luxury units that have to be presold, that’s a lot of units. That’s some stiff competition. I hope this all works out.”

The brightest downtown project: The Place on First, partly because it will have only 16 residential units, along with office space.

Who is buying and who is not? “Millennials are not buying,” he said. “Most of them are living in an apartment, but many of them are living in your second bedroom.”

In downtown Fort Myers, he sees two buyer groups: baby boomers and buyers in the workforce who lost their homes in the bust. Some of that will likely be driven by higher interest rates expected to come.

“Baby boomers, there’s tons of them,” he said. “They’ve got money. These folks have been sitting on the sidelines for the most part the past 10 years. Their investment portfolios have been going down. They’ve been cautious. They’ve waited long enough. They’re coming in droves, but the difference is they’re going to be spending less money.”

Thibaut said builders who develop homes in the $250,000-$300,000 range should be in good shape.

Buyers in the workforce who lost homes in the downturn have been forced to rent apartments in many cases: “After five, six years they’ve saved money and got their credit back. These buyers want to get into single-family homes. The question is, is the price right?”

In 2016, he said the pendulum swung to houses. Buyers can pay $1,500 monthly on a $225,000 home mortgage or rent a nice apartment for the same amount. However, he noted that can change if interest rates rise.

“These value oriented builders are after those renters,” he said. “They’re chasing that buyer.”

Where are the buyers going to find a home in the $250,000 price range? Northeast Naples, north Cape Coral, Lehigh Acres and east Fort Myers and Charlotte County.

Babcock Ranch: “We all are hearing about Babcock Ranch. This is a big, long-term project. Let’s stay tuned next year and the following year to see how it does.”

Threats and challenges in market: “When 25 percent of the cost of a new house is regulation, that is a big problem.”

Denny Grimes, president, Denny Grimes & Company

“We can’t always see what’s going on,” Grimes said as he took the stage.

As evidence, he pointed to the Chicago Cubs ending their championship drought after more than 100 years and Donald Trump being elected president.

The median price of existing homes in December was $250,000 in Lee County, $450,000 in Collier County and $195,000 in Charlotte County.

Last year was the first time he could recall in which Lee’s top home sale eclipsed Collier’s top sale. A $16.3 million home on Captiva was sold for $16.3 million, beating Collier’s standout of $15.15 million.

The number of homes sold in 2016 was down in Lee and Collier counties: “Notice the color (red). Sales are down 7 percent.”

Sales were down in each part of each county (other than Lehigh, up just slightly), with luxury sales and condo sales also down: “You getting the trend here?” he said. “I’m calling 2015 a peak year, because we are seeing sales drop.”

Median home prices were up 10 percent in Lee and 7 percent in Collier in 2016: “There’s always more to the story.” Still, because of fluctuations, he said prices are basically flat.

Takeaways: slowing sales plus rising inventory has led to slower price growth: “This is how a rational market is supposed to react. Tell your buyers they can proceed with confidence. No crash. No bubble. It’s fine.”

Grimes implored agents to take note of the market myth that “season” is the best time to sell: “It kills me to hear that because it’s not true. People because of the internet can shop year round and they do.”

Downtown Fort Myers: “The success of downtown is going to be based on condos … downtown has a vibrant yet narrow niche. There is little investment opportunity. There, it’s a user-driven market. Less inventory is better than too much. Bottom line: smaller is better.”

Millennials or baby boomers in downtown? “I’m a boomers fan. We need people living here with money. That fills that need. It grows the market.”

Grimes, who has lived in the Fort Myers area more than 50 years, talked of the “edge of the canvas theory.” As Edison Mall was once on the edge of town, that’s how Babcock Ranch is perceived today.

“Babcock’s going to stretch the canvas,” he said. “It will happen. It will not happen as fast as some hope.”

Grimes said there’s investment opportunity in what he called the market’s sweet spot. In Lee, that’s less than $300,000; in Collier, it’s less than $500,000.

Look forward: “The over-optimistic national headlines will be misleading. Affordability is going to be squeezed. Buy sooner, not later.”

Stan Stouder, founding partner, CRE Consultants

Stouder’s presentation focused on what was, what is and what’s next.

Apartments were pulling the market in 2015, but that segment saw a 86 percent decline last year in the number of those units permitted. What’s next? “The apartment market will continue to cool.”

Stouder touched on the “Trump effect” as the country elected Trump president: “I’m experiencing this in my business and not in just some small way.”

Business owners, he said, are hopeful that Trump will deliver on campaign promises such as deregulation, tax relief and infrastructure improvements.

What’s next? “The optimism of the small-business community jumped and more optimism means more spending. It means greater demand for commercial property. We’re finding sellers that are returning to the market that hadn’t been there before.”

New commercial construction permits in Lee were up 62 percent in 2016, but the value of those went down 52 percent. “Why? I can answer that in two words: fewer apartments.”

Senior housing: at least nine projects are under construction. For example, Campo Felice in downtown Fort Myers is expected to open this summer. It’s about 50 percent pre-leased. Those behind that project are preparing to do a $45 million sister tower devoted to memory care and medical offices.

Another senior housing project called Avida is going up on property near Gladiolus Drive and Summerlin Road. The $95 million project is expected to have 460 units on 32 acres.

“Senior housing is to the market of 2016 as apartments were in 2015,” he said.

Sales of large tracts of land (50 acres and greater) have picked up in the past six months. Why? It’s because so much growth is expected in Florida and because the state is one of only seven without an income tax. What’s next for such land? “Now is the best time since 2006 to sell land.”

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