Those giant tax cuts for the wealthy at the end of last decade continue to pay off in investments in Southwest Florida.
We’ve reported a lot about that phenomenon, and the resulting impact is part of today’s expensive economy. Home prices are at record levels, out of reach for many locals.
Now, we have new data illustrating how huge it’s been in the region. Here’s what to know.
Where did Collier and Lee counties rank among cash buyers?
Both Collier and Lee counties rank among America’s Top 8 places for homes purchased with cash, according to property data source ATTOM.
As ATTOM noted in its report, this goes along with “a competitive market for buyers (and) a significant influx of investors.” That’s left a lot of families on the sidelines.
“We have not seen the young family with kids, a dog and a mini van in quite some time,” said Realtor and broker Joe Pavich, owner of J. Pavich Real Estate, noting Bonita Springs Estero Realtors group statistics. “We are still a high percentage of cash versus mortgages with 70% of transactions cash sales in December.”
How high did Collier finish in nation on median price increase?
Overall, Collier has the nation’s second highest percentage of cash buyers among metro areas with 58.9%, up from 51.7% two years ago. Lee landed eighth at 52.2% after being just under 50% in 2021.
Among the top 10, cash investors by far, are paying most in Collier, having 2023’s second largest median price increase nationally at 10.6% over 2022, behind Hilton Head, South Carolina’s 12.2%, ATTOM stats show.
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What is the median price in the Naples and Marco Island area?
The Naples Area Board of Realtors ended 2023 with an overall December median sale price of $631,000, not including Marco Island, where its realty group reported a December single-family median of $1.65 million and condos, $670,000.
Institutional investors continue to affect markets, according to the National Association of Realtors ― also known as NAR — Redfin and others. Investors purchased nearly one in five homes sold in 2023’s fourth quarter, according to Redfin real estate.
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Where are investors putting their money these days?
And a significant change is occurring.
Many investors are shifting purchases to burgs originally largely bypassed in the decade’s initial real estate boom, but now are comparably affordable after more popular destinations were bought up.
What list includes Naples, Macon, Youngstown and Syracuse?
These newer emerging investment havens helps explain why Macon, Georgia topped ATTOM’s list of cash buyers, with 61.5%. Others now include Youngstown, Ohio and Syracuse, New York.
Redfin discovered that investors bought 26% of the country’s most affordable homes in the fourth quarter, the highest share on record. Low-priced abodes ― those in the bottom third of local prices ― made up 46.5% of all investor purchases. NAR research has found that home costs rise faster in areas with a higher share of investors.
Many of the investments driving up home prices link back to tax cuts that RCLCO real estate consulting noted were “marketed as a Christmas present for the middle class (but actually) heavily skewed toward upper income families and corporations,” cutting corporate tax rates from 35% to 21%.
The result left investors with more money to play with, according to National Real Estate Investor magazine. Right off the bat, the wealthiest 1% of households received nearly 60% of the tax breaks, and the bottom 90% got less than 14%, according to the National Bureau of Economic Research and ProPublica, as every day citizens cope with an economy delivering higher prices.
“Billions of dollars, trillions of dollars, just sloshing around in the economy looking for places to go,” as described by Mike DelPrete, a global real estate tech strategist and scholar at the University of Colorado Boulder who does regular podcasts and analysis. “Real estate is a really, really good investment.”
Based at the Naples Daily News, Columnist Phil Fernandez (pfernandez@gannett.com) writes In the Know for the USA TODAY Network.
