Lee and Collier Counties saw a flurry of building permit activity last year, driven by a growing demand for new single family homes. In Lee County, contractors pulled 556 single family permits in 2012. This was up nearly 50% from 2011 and up 68% from 2009, when home building hit a historic low.
The major factor driving the market in 2013 is the lack of inventory. Many trade-up borrowers have been locked out of the market because their outstanding loan balance is greater than the market value of their home. Current owners need to sell at prices high enough to extinguish their debt and provide equity for the next home purchase. Until home prices began to rebound in 2012, these borrowers had been effectively locked out and unable to list their homes for sale. With home prices rising, tight for-sale inventory will begin to ease.