2009 was the worst year in a decade for the construction industry in Cape Coral.
A mere 173 single family home permits were pulled last year in the city, a far cry from the 1,753 permits pulled in 1999.
As the years progressed, so did the housing and construction industries, with the number of permits and their values steadily increasing as the decade wore on.
The industry hit a crescendo of sorts in 2005, when 7,362 single family home permits were pulled, valued at more than $750,000,000.
Then came the recession, the collapse of the finance and construction industries, record unemployment — and the disparity between the first and second halves of the decade in the city grew wider with each passing day.
Experts are optimistic about the coming year and, to some extent, the decade ahead, but are also being equally realistic.
With the Cape still sporting a deep, if not wildly affordable, inventory of abandoned and foreclosed homes, it might take a while before new construction recaptures some of the lucrative magic it wielded half a decade earlier.
“I feel truly we may be a bit behind where we should be right now,” said District 1 Councilmember Marty McClain, who comes from a background in the construction industry. “We’ve got a tremendous job in front of us, to get back to where we should be.”
McClain said he’s starting to see some movement in the existing home inventory, with investors snatching properties on the cheap, as well as first time homeowners taking advantage of bargains.
On the heels of this, McClain said, will come the remodeling industry, who will take advantage themselves by offering reduced costs on repair and remodeling jobs.
As the number of remodel jobs go up, so do the number of permits, he said.
“It’s not the high dollar permits, as much as the smaller remodel permits that come into play,” McClain said. “This is the third recession I’ve been through in this industry, and recovery always began with the remodeling industry.”
The county followed much of the same path throughout the decade, peaking in 2005 with 9,747 single family home permits being pulled.
While the total value of the permits is unknown — the Lee County Department of Community Development doesn’t keep track of the value — what is clear is that the county followed the same trend as Cape Coral.
Only 331 permits were pulled in 2009; in 2000, 2,666 permits were pulled.
“It’s not unexpected that numbers have been so low, in both Cape Coral and Lee County,” said Michael Wright of the Lee Building Industry Association. “There’s such an excess amount of foreclosed property … until that amount of inventory is reduced, you can’t compete in those price categories.”
Some of Wright’s view echoed Marty McClain’s, in that the remodeling industry will continue growing as a major market.
He thinks that things can’t get any worse than 2009, and admits that it’s difficult to predict where things might trend this year, and beyond.
While investors still have the opportunity to take advantage of the current conditions Wright said, those who are looking to build will have utilize certain “niche markets.”
“I’ve seen some very positive things,” he said. “The exception so far, in this industry, has been custom homes and niche markets.”
One developer that’s trying his hand at the so-called nice market is Roger Schutt.
In conjunction with Aranda Homes, Schutt’s Premier Properties of Cape Coral is planning to develop the former Pinewood Lakes subdivision into “Celebration Cape,” with what Schutt describes as small town, cottage-style homes.
Schutt is planning a groundbreaking next Friday at 10 a.m. on two model homes in the development, that he hopes will showcase what he feels is a truly unique product, one the existing inventory of homes doesn’t have.
“We have a product that is unique in design, size, and price,” he said. “It makes it a lot more feasible for first-time buyers, or people downsizing, or the boomers that are still coming into the market place.”
Schutt feels the small town atmosphere he’s creating in Celebration Cape, with the detached oversized garages, deed restrictions, and green building options, will trump anything that an existing home can offer.
“A new product gives people something without baggage,” he said. “And with very little new home product being built, now is the right time to bring in new product.”
According to the Realtor Association of Greater Fort Myers and the Beaches, Cape Coral had 2,232 single family homes, and 460 condos or town houses available in the existing inventory, as of November.
Fort Myers boasted 2,014 single family homes, and 1,850 condos or town homes.
CEO Peggy Hummel said those numbers (December’s numbers were not available as of Friday) are a bit deceiving because the overall inventory countywide has come down between 2008 and 2009.
According to Hummel, in November 2008 there were 18,212 available homes in Lee, Hendry and Glades County. One year later there are 11,486.
“We haven’t see prices like this in years, so to the buyers we’re saying there’s never been a better time to buy,” Hummel said. “We’re seeing some good signs.”
With the first time home buyers tax credit extended until April of this year and median prices still relatively low — the Cape’s median price was $110,200 in November –Hummel said those who can pay cash are truly are king.
But Hummel remains cautious, keeping a close eye on the Lee County Clerk of Courts office, where some 23,000 foreclosure cases are awaiting disposition.
Foreclosure filings are in decline, but with the number of foreclosures still to hit the market, Hummel knows there’s a lot of work ahead.
“The unknown is going to be all the foreclosures in the hopper,” she said, adding. “In order for us to heal, we need to have people from up north sell their homes and come down. It’s still warner down here than up north.”