Good and bad: Real estate boom changed face of Lee County

By Jeremy Cox
Sunday, September 18, 2005
Bonita Springs, Florida

A little more than a year after moving to Estero, Michael Burke has decided to sell his lucrative computer hardware company in Mentor, Ohio, along with its marketing offices in New York, Los Angeles and Washington. He’s trading in his old life for a real estate license.

“I’m just going where the money is and what excites me,” said Burke, a 43-year-old whose business minor from Kent State University was the only training he brought to his new trade. “It’s a gamble. You’re playing the odds.”

But the rapid success of his personal investments has made the south Lee County real estate market look like a sure bet.

Here’s just one example: Burke signed a contract to buy a three-bedroom, three-bathroom home in the Grandezza gated community off Ben Hill Griffin Parkway at the preconstruction price of $536,000. The home isn’t finished yet and Burke hasn’t closed on the property, but he already has it listed for sale for $799,000.

In case you haven’t noticed, Lee County, like much of the country, is swept up in a real estate craze. The median sales price of existing homes in July soared to $287,500, a 44 percent jump compared with the same month last year. The only area in Florida with a faster appreciation rate that month was Orlando, according to the Florida Association of Realtors.
Nationwide, the National Association of Realtors said Lee County ranked second, behind only the Phoenix area, in home appreciation in the second quarter of 2005.

Even if the white-hot pace of real estate investment cools off tomorrow — which, some experts warn, is a real possibility — it will have left an indelible imprint on the landscape and culture of Lee County.

In less than 2 years, the boom has:
— Changed the look of whole communities. The value of permits for new single-family homes hit $3.1 billion in Lee County for the first eight months of this year, surpassing last year’s 12-month record of $3 billion. Gated communities now cover about 60 percent of Bonita Springs’ landscape. The city’s population is expected to swell 40 percent in the next eight years, from 41,070 to 57,300. Meanwhile, orange groves, sand mines and cow pastures in eastern Estero are turning into swanky housing developments; the community is projected to grow by more than 20,000 in that same period.

— Redefined the meaning of “affordable.” The rich are displacing the poor and the middle class. In San Carlos Park, once a haven for the working class, you are more than five times more likely to find a home priced at $500,000 and above than for $200,000 and below. Builders complain about the lack of skilled laborers but continue to construct homes out of the price range of their workers.

— Made millionaires out of many but left others behind. With some notable exceptions, that division breaks along racial and ethnic lines. Hispanics, in particular, are much less likely to own their own homes than whites. Although Hispanics make up just 16 percent of Lee’s population, a Bonita-based affordable housing developer estimates that 40 percent of its clientele are of Hispanic origin.

— Transformed neighborhoods into mini-stock exchanges. Investors are cashing out quickly and moving their money to the next “flip,” “spec” or “fixer-upper.” Between July 2004 and July 2005, some 509 homes and condominiums sold twice in Bonita Springs, Estero and San Carlos Park, with an average profit of $67,072 between sales, a Bonita Daily News analysis of Lee County Property Appraiser records shows. Rampant speculation is deepening fears that a real estate bubble has settled in Lee County and could burst without notice.

— Become the talk of the town. From the stands surrounding Little League baseball fields to the line at the supermarket to the company breakroom, tales of buying and selling, of remodeling and refinancing, are inescapable. Everyone, it seems, knows someone who bought a two-bedroom in Bonita Springs in the 1990s for $125,000 that has quadrupled in value. Everyone, it also seems, wants a share of the fortune that awaits, literally, at every corner.

“Real estate investing has become vogue”, said Mark Mathosian, financial administrator for the FBI investigation department in Fort Myers. “You don’t really hear a lot of horror stories, and that’s one of the problems. You don’t hear about the guy who bought the townhouse in Bonita and couldn’t sell it. We’ve been in an up-direction market for so long, people just assume there’s no downside.”....MORE