Southwest Florida housing permits down 13%

Florida’s not likely to apply for a patent on it, but in many ways the state invented the real estate boom and bust cycle. 

Veterans of the real estate, development and land industries statewide have been talking about this phenomenon for years. 

The latest into the fray: Fort Myers-based LSI Cos. The commercial real estate firm, with what it calls “one of the region's most comprehensive and effectively staffed research departments,” writes about the up-and-down nature of the Southwest Florida real estate market in its LSI Market Trends report for the third quarter. The report says in general, the three-county market, of Charlotte, Collier and Lee, “continues to transition from the post-pandemic boom toward a phase of normalization marked by slowing permit issuances and leveling population inflows.”

In raw numbers, the report found a total of 22,403 permits were issued for new residential housing units in Collier, Lee and Charlotte counties combined for the one-year period ending in September 2025. That’s down 13.2% from the previous one-year period, which saw 25,809 new residential housing units permitted. On new single-family detached homes only, the market fell 11.9%. Collier actually posted an increase in permits, while the other two counties fell, with Charlotte’s drop surpassing 40%. 

The 70-page report says housing starts in Florida are forecast to decline over the next year, and it projects the region will be flat for the most part. It adds that “the housing market remains emblematic of the region’s cyclical development patterns: rapid spurts of building activity followed by contraction.”

“Headlines of over-delivery in the residential sector are proving accurate in many SWFL submarkets,” the report adds. “This pattern follows a familiar Florida dynamic: excess profitability attracting ruinous competition.” 

The report’s authors add that this chatter doesn’t mean the market is in distress. Instead, it “is recalibrating to sustainable demand levels consistent with the region’s long-term demographic base. While deceleration in permits and starts may appear bearish, this period of stabilization is structurally healthy. It prevents overbuilding, eases material and labor constraints and lays groundwork for the next expansion cycle — continuing SWFL’s long-standing rhythm of growth spurts followed by stabilization periods.” 

There’s that boom and bust again.