Building Permits Crawl to Near Stop

Housing permits continue to spiral in the wrong direction for builders, real estate agents and those impacted by the construction industry.On its current pace, Cape Coral will issue fewer new single family home permits this month than it did during a record November, when only 12 were issued. Through Wednesday, only 5 permits have been issued for new single family homes. Unincorporated Lee County, Bonita Springs and Fort Myers Beach also are not experiencing any kind of a holiday boost. Only 32 permits had been issued as of 4 p.m. Wednesday. In November, 60 were issued, compared to 357 in November 2006.December is traditionally a slow building month, said Cape Coral spokesperson Connie Barron said.

But the declines, even for a slow time, are significant when compared to past Decembers. In December 2006, 90 permits were issued in the Cape, while 403 were issued in December 2005. The record is 858 for March 2005.“We keep thinking it can’t get any lower, and every month it gets lower,” Barron said. “We just have to cross our fingers and know we have to get through this. It is just uncomfortable in the waiting room.”

From Jan. 1 to Wednesday, Cape Coral had issued 756 this year. Lee County has issued 2,395 in that same time.The continued decline continues to surprise those in the industry.“I have never seen things get this low,” said Sal La Spia, owner of European Construction of Southwest Florida.La Spia has been in business in Cape Coral for six years, he said, through the most recent boom and bust. After building reached a zenith in 2004 and 2005, La Spia said he expected it to slow eventually, but he never expected this.“Property went up faster here than anywhere else, and then it went down faster,” he said.District 3 Councilman Bill Deile said the numbers were distressing.“That’s virtually down to zero,” he said.Deile figured the bust was coming in part because so many people in recent years have moved into homes they could not afford.La Spia agreed, citing high foreclosure numbers and a large inventory of unoccupied homes on the market today.

In the past year, actions have been filed on a more than 11,700 Lee County foreclosures.Russell Weyer, a senior associate at Fishkind and Associates based out of Naples, said Cape Coral is suffering from an excess inventory, and doesn’t expect that probably to disappear overnight.“It won’t get absorbed overnight,” Weyer said. “I would say there is about three years of inventory to work through.”He said Cape Coral, along with Lehigh Acres, are suffering the most with the current housing slump in Southwest Florida.La Spia placed blame on banks and lenders giving out loans to unqualified buyers.“Banks were giving money to everybody who had a body and name, even if they didn’t have solid credit,” he said.Both Deile and La Spia also figured real estate prospectors who were making heavy profits flipping homes a few years ago contributed to the market becoming over-valued today. Weyer also said a number of builders who bought massive amounts of land tried to become developers on the fly, but soon realized they were not prepared for the market fluctuation.“You can’t change your business model overnight,” Weyer said.La Spia said problems in northern states are also hurting the local market. “In Michigan, things are much worse than they are here,” he said.
Since so many home buyers in Southwest Florida have traditionally come from northern states, a recession in Michigan or Ohio has a direct effect on home sales here, economists say.La Spia hopes things will improve in the next year.“It really depends on the economy up north,” he said. “This is not just happening in Florida. It’s everywhere.”

Weyer’s three-year prediction is more pessimistic, but he said smart investors can weather the slump.“Now is not the time to put your house on the market unless you are in for a desperate sale,” Weyer said.“If you are a builder, you’re going to have to wait this one out. In the unbridles exuberance of a few years ago, people were adding so many people and couldn’t build lots fast enough. They are trimming their staffs now. They have to pare back.“The ones who didn’t try and ramp up everything, and just tried to service what they had are the ones they are doing much better in the long run.” Courtesy Fort Myers News Press.