The State of Island Real Estate

When I look back over my previous posts, it looks like I have made some good calls. The mainland Florida real estate markets have taken a beating ( I see 20% price drops for some price segments for homes in Cape Coral, 30% drops for some canal lots in Cape Coral, and as much as 50% drops for lots in Lehigh Acres). So far, the barrier islands like North Captiva have weathered the storm much better. The lesson here is all about supply and demand. Islands, by nature, have a limited supply of land. While resale inventory on North Captiva has risen 50% over the last year or two, the mainland resale inventory has risen about 200% and is still growing even today. Markets like Ft Myers/Cape Coral will take quite a while to digest such an increase. Back to supply and demand. The absolute best market I see here is on Useppa Island - a very manicured and well cared for private island with lots of history. In 2006, about 15 properties sold there. Currently, there are only 12 Useppa properties on the market. If the 2006 pace continues there, all current inventory could theoretically sell in 2007. Now there is one Florida market I would love to be in when real estate starts to move again! When will the market move again? I'll save that for the next article.