The Emerging Economy in Estero

The Estero Housing Market Since 2000

Throughout the past decade the Estero real estate market has been a shining example for Florida, both in terms of quantity and quality.

Just ten years ago Estero was a sleepy rural community located midway between Fort Myers and Naples.  It consisted of some 2,400 homes in 13 residential communities plus a few stores and filling stations.

Since then about 13,500 new homes have been constructed in spite of the recent slowdown since 2006, of which 6,350, or 47%, are single-family homes. Today the average building value of newly constructed homes in Estero, (excluding the land beneath the structures), is $338,000.  That's more than double the 2000 value.

In these eight years, 23 new residential communities have been completed containing about $2.6 billion of new homes, (again excluding the value of the underlying land.)

Some of the largest and best known residential communities in Estero are among those built during that period, including Pelican Sound, Grandeeza, Rapallo, The Cascades, and the four communities of The Brooks -Shadow Wood, Copperleaf, Spring Run and Lighthouse Bay.

Between 2000 and 2004 the demand and supply of new housing in Estero seemed to be in equilibrium with an average of 1,800 new homes a year. The absorption rate was higher in 2000 and 2001, declined about 30% after 9-11, but recovered in 2004.

In late 2004, and the first three quarters of 2005, speculative fever struck the Estero housing market.  The number of homes permitted in 2005 increased by nearly 1,200 over 2004. This speculation created an oversupply of more than 1,000 new but unoccupied units, (mostly condos), in Estero. 

As a result of this overbuilding the number of new homes permitted declined dramatically during 2006, 2007 and 2008. However, this three year slowdown has provided the Estero housing market the time to absorb much of its unsold or vacant homes.

Today housing demand and supply in Estero are almost back in equilibrium.

An October 15, 2008, study of the Resale-Attached housing market in Estero and Bonita Springs identified 1,119 MLS listings for sale in Bonita Springs and only 316 in Estero.

At the same time the 2008 Resale-Attached closings are expected to be 499 homes in Bonita Springs and 223 in Estero - so the Listing vs. Closing ratio is 224% in Bonita Springs and only 142% in Estero.

In addition the number of 2008 closings in Estero increased 72% over 2007.

This all bodes well for the Estero condo real estate market in 2009.

While both the Bonita Springs and Estero real estate markets are far better off than most Lee County communities, it is clear from this study Estero has a much smaller housing surplus than Bonita Springs.

In fact, Estero may be the best real estate market in Lee County. If this trend continues, in spite of stricter mortgage lending, the surplus of Estero homes should soon be depleted.

Residential property values have declined in Estero since 2005 - as they have throughout Florida and the entire country. Much of this decline has been caused by homeowner short sales to avoid foreclosure and developers discounting their asking prices to meet loan commitments and to generate the cash flow necessary to survive the economic down-cycle.

The October 15th Resale-Attached Housing Study also indicates Estero’s “sales price to asking price” ratio actually improved from 92.1% in 2007 to 93% in 2008.

That 93% ratio is equal to the 20 year average for the area and confirms the current demand/supply equilibrium in Estero.

Meanwhile, the Bonita Springs “sales price to asking price” ratio in the Resale-Attached market declined from 91.3% in 2007 to 88.6% in 2008.  This confirms the current oversupply in Bonita Springs.

In addition, the average price of  Resale-Attached housing declined 13% in Bonita Springs last year but only 4% in Estero.

In conclusion, Attached-Residential, the weakest segment of the Estero housing market, appears to be at or near the point of Demand/Supply equilibrium in this housing down-cycle. And based on these recent numbers and previous real estate cycles, Estero’s residential values and absorption rates should start to increase in the near future.

The Community’s Commercial Real Estate Market

Since 2000, over $700 million has been invested in Estero's numerous commercial developments, both large and small.

The first major Estero commercial development during this period  was the Hyatt Coconut Point Resort which had the misfortune of opening shortly after 9/11 but recovered quickly.

The Miromar Outlets Mall expanded throughout this period and is now in it sixth phase with a total of over 600,000 square feet of shopping and 140 stores.

Estero’s commercial development peaked in 2006 when $185 million was permitted by Lee County. Much of this investment was for the construction of the 1.1 million square foot, 130 store Coconut Point Town Center which was completed in late 2007.

At present the Estero community contains about 3.6 million square feet of commercial space with over 2.1 million located along US 41 and 1.5 million along Corkscrew Road.

In addition four hotels containing 825 rooms were built in Estero in these eight years.

While much has been developed since 2000 Estero’s current zoning would permit an additional 6.5 million square feet of commercial development and 1,670 more hotel rooms so there is lots of room for growth. It’s expected the addition of the Boston Red Sox training facility in South Lee County will accelerate some of this development.

Early Community Input and High Standards of Planning and Design Underlie the Quality of Estero’s Development

The high quality and consistent, outstanding architecture and landscaping of Estero’s commercial corridors is the result of the development and adoption of the Estero Community Plan in 2001. The framers of the plan, all community volunteers, foresaw the future commercial development of Estero and wanted the US 41 and Corkscrew Road commercial corridors to be as beautiful as the adjacent residential communities then under development.

The Estero Community Plan established the community’s vision as follows:

“Estero’s growth will be planned as a village, establishing defined areas for tasteful shopping, service and entertainment, while protecting and encouraging residential neighborhoods that encourage a sense of belonging. Weaving the community together will be carefully crafted limitations on strip commercial uses, inappropriate signage and certain undesired commercial uses, while additional design guidelines will be established to ensure attractive landscaping, streetscaping, architectural standards, and unified access points.”

Shortly thereafter Estero’s community leaders obtained Lee County Board of County Commissioners' approval of three major changes in the County’s Land Development Code establishing higher standards of development regulations for Estero.

These regulations create “overlay districts” along US 41 and Corkscrew governing the appearance and location of buildings and, most importantly, their compatibility and connectivity with one another. Other regulations govern the location and treatment of “big box” stores and the types, size and architectural standards of signage and lighting as well as road and building setbacks.

In addition to these high design standards, new mandatory opportunities were created for community input on all new Estero projects prior to the developer’s application to the County for zoning or development order.

As a result, the Estero community has had a valuable extended period of time to constructively work with developers to meet or exceed the community’s needs and, if unsuccessful, to appeal for changes to Lee County staff or the County Board of Commissioners.

Meeting the Infrastructure Needs of Rapid Growth

Over the past ten years Estero’s infrastructure has kept pace with its exceptional residential and commercial growth. Lee County and the State of Florida have invested approximately $500 million in new or widened roads in South Lee County since 2000.

Estero’s north-south corridors have been greatly expanded: the widening of US 41 to six lanes, the new four-lane Livingston/Imperial/Three Oaks corridor and the four-lane Via Coconut Point from Corkscrew Road to Bonita Springs.

What were four north-south lanes through Estero ten years ago are now 14 lanes.

Other major projects currently underway in Estero will improve traffic flow even more.  They include the widening of Three Oaks Parkway from Corkscrew Road to Alico Road; the Estero Parkway Extension and I-75 Overpass from Three Oaks Boulevard to Ben Hill Griffin Road and the six-laning of I-75. 

Estero’s recreational amenities have also been greatly expanded. The 65 acre Estero Community Park opened to the public in 2006.  It features a 42,000 square foot recreation center and an attached amphitheater stage for concerts and other public events with lawn seating for over 5,000. In addition 100 acres was acquired by the State and County to permit the Koreshan State Historic Site to be doubled in size.

The Estero community is also working cooperatively with the City of Bonita Springs to obtain a 24/7 Freestanding Emergency center for the area, probably on land now owned by Lee Memorial Health Systems in the South Village of Coconut Point.

Convenience of Major Regional Anchors

No other southwest Florida community can boast so many convenient major facilities as Estero.

The newly expanded Southwest Florida International Airport is only a 15 minute drive from Corkscrew Road in Estero.

Florida Gulf Coast University, with 10,000 students and growing fast, is located on Estero’s northeast border.

The region’s largest sports and attraction arena, 7,000 seat Germain Arena, home of the minor league Florida Everblades hockey team, is a short walking distance from Estero's 140-store Miromar Outlets Mall and International Design Center on Corkscrew Road.

The 130-store Coconut Point Town Center and Hyatt Regency Resort and Spa are both located on Coconut Road in Estero. 

In addition, Lee County is under contract to provide the Boston Red Sox with a new spring training complex in south Lee County no later than December 2012.  The Red Sox currently train in Ft. Myers and the Minnesota Twins have their spring training facilities at Hammond Stadium in south Lee County, only ten miles from Estero.