Joe Pavich Sr

Joe Pavich Sr

By Cheryl Mandell


Conventional wisdom might predict home-seekers would shy away from Southwest Florida after seeing the devastation wreaked by Hurricane Ian. Not so, say local realtors. 

Continued low inventory from the “COVID housing boom” was only compounded by losses from Hurricane Ian, keeping demand high and prices higher, said Joe Pavich, Sr., owner of Pavich Realty World and a 33-year resident of Estero.

“There is currently very little under $450,000 in Estero for single family homes,” he noted.

Estero continues to be a desired location for retirees seeking sunshine and less taxes. Add to that young professionals and families with flexible jobs who are now migrating south, thanks to workforce culture shifts allowing more employees to work from home. 

Supply is not meeting demand. New listings for single family homes were down 7.2% year-to-date from October 2021 through October 2022, per the Bonita Springs-Estero Board of Realtors. Meanwhile, the median sale price for homes in the area has risen by 32%, from $530,000 to $699,500. Many homes and condos sell within days of listing.

“Our midterm election proved that people like the way Florida is being governed, and they want to live here. That’s a good sign,” Pavich said.

Hurricane Ian has caused buyers to pay closer attention to flood zones, he adds. This makes the many new communities along East Corkscrew Road even more attractive.

Lee County has approved the Kingston Development by Cameratta Group, a 6,600-acre site planned for 10,000 homes plus commercial space. With other developments in the works, there is a potential for more than 36,000 new residents to be added to the local population within the next several years, all down east Corkscrew, according to Allan Bowditch, chief communications officer for the Estero Council of Community Leaders (ECCL), a nonprofit citizen’s organization. 

Bowditch is apprehensive about the rapid expansion. 

“We do not have the infrastructure to handle it,” he said. “That is my greatest concern. Unfortunately, I do not see a holistic approach, which I believe is really badly needed to address transportation and communication issues, environmental and water quality issues, health and educational issues.”  

The lack of affordable housing for middle-income workers is also a concern. In an ECCL report titled, “Why We Need Workforce Housing In The Greater Estero Area,” Bowditch writes about the dilemma of retaining talented FGCU entrepreneurship graduates in the area, many of whom would like to stay to launch their businesses:

“This provides an excellent opportunity for Estero and the areas surrounding FGCU to continue developing the amenities that attract a younger population. The missing piece continues to be a need for ‘startup’ or workforce housing options, first homes, or apartments priced accordingly.”

Sharon Van Rite, chair of the Greater Estero Chamber of Commerce Board of Directors, agrees.  

“Beyond a doubt, affordable housing is a real challenge. There is a surge of new developments going up along the east corridor, as well as a growth in state-of-the art medical facilities, but very little to offer those professionals living on the salary of a nurse, firefighter or teacher,” Van Rite said.

What can be expected in the year to come? Pavich doesn’t see any signs of the market slowing down in 2023, despite local beaches still being closed.

“As far as price goes, I foresee a leveling out of real estate and maybe looking at a 1% growth in price over the next year,” said Pavich. 


The Insurance Conundrum

The one caveat to unbridled optimism in real estate is a looming property insurance crisis. Hurricane Ian was among the costliest hurricanes in America’s history. RMS, a risk management company, estimates Ian’s devastation at $67 billion in privately insured property damage across fives states, led by Florida. 

Lee County data indicates more than 48,500 residential properties were damaged by Hurricane Ian, with more than 5,000 destroyed and another 13,100 sustaining major damage. 

Brian Chapman

Brian Chapman

Brian Chapman, Jr., owner of Chapman Insurance Group, one of the largest independent insurance agencies in Southwest Florida, is concerned that Ian will only intensify persistent problems in Florida’s insurance market. 

Less than 10% of homeowner property claims nationwide are filed in Florida, yet a staggering 80% of lawsuits related to property claims in the entire country are filed here, Chapman explained. The billions of dollars in legal costs to insurance companies is passed directly on to homeowners in higher premiums. Floridians pay the highest home insurance premiums in the U.S.

“Before Ian even happened, Southwest Floridians were already dealing with carriers not financially making it. We had six official liquidations from January until Ian. So that tells you, OK, we’ve got a problem here,” said Chapman.

For the insurance companies still operating in Florida, many were forced to “shed policies.” In Southwest Florida, Chapman estimates there were 5,000-10,000 policies per month being non-renewed. 

“It’s a vicious cycle of non-renewal, replace the policy, pay more for probably less coverage. The last two years have pretty much been that cycle,” said Chapman. He has seen an average 35% rate increase per year for his clients over the past two years. 

Hurricane Ian’s devastation compounds the problem. 

Many people have found themselves with inadequate insurance to rebuild older homes to the stricter hurricane standards now set by the Federal Emergency Management Agency (FEMA). According to FEMA’s 50% Rule, repairs and improvements are prohibited on damaged homes in flood zones exceeding 50% of their market value unless the entire residential structure is brought up to the most current building codes and flood regulations. 

For some homeowners, that will be too costly. 

“West of 41, there will be areas that will never be the same,” observed David Willems, Estero public works director.

Others will see opportunity.

“I think for every one homeowner on the negative side who says, ‘Hey I’m not going to do this, I’m not going to rebuild, I’m not going to be here,’ there’s going to be two who want to,” Chapman said. “I think we’re going to build back faster, better, and four or five years from now, we’ll stand back and say, ‘Wow, we did it. This is the place to be.’”

And when all the homes are up to code, insurance rates could start to fall.

“At some point, in a competitive market, you know, it’ll balance back out and maybe we’ll see the rates go the other direction and coverages come back – but I don’t see that at least for the next two years,” Chapman said.

The bottom line is people still want to live in Southwest Florida, said local economist Chris Westley, dean of the Lutgert College of Business at FGCU.

“What we’re experiencing has been devastating, but five years from now, it’ll be completely different – and better,” he said.

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