Stuart, Port St. Lucie, Vero Beach real estate market hot amid COVID
The throngs of newcomers to the Treasure Coast this year have peaked in a hot residential and commercial real estate market.
The problem is, there isn’t enough stock to adjust, which is causing prices to skyrocket.
Historically, this would deter buyers and cool the market. But not this time.
People keep buying real estate and are entering an expensive market that shows no signs of flattening anytime soon.
“I’ve been in business since 1980 and I’ve never seen this before,” said Douglas Davis, president of Richard K. Davis Construction, a commercial development agency based in Fort Pierce. “I’ve been through all of the ups and downs, cyclical recessions and booms, but this one takes the cake.”
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The real estate market
The Treasure Coast population has grown in number and in affluence in recent years, said Yvonne Baker, executive director of Florida State University’s real estate hub.
The region’s affordability is the predominant driving force, Baker said. The majority of newcomers are moving away from the far more expensive markets of South Florida and New York – and they have the money to spend and drive up costs.
“The higher the demand, the higher the cost,” said Baker. “If a lot of people want something, you can ask for more for it.”
COVID-19 was a catalyst for the influx, Baker believes. There are several reasons for this:
- People who improve their quality of life depending on how and where they live
- Remote jobs that allow employees to work from anywhere
- Extremely low lending rates.
Housing market
A housing boom from June to October 2020 reduced the area’s inventory before another rush of buyers hit this year – prices kept rising and sales accelerated.
According to market data, the median sales price of single-family homes in June this year has increased by:
- St. Lucie: 13% and reaches $ 305,000
- Indian river: 12.6% with a high of $ 340,000
- Martin: 8.9%, reaches $ 490,000
“If it hits a certain price, demand will slow, but we haven’t reached that number yet,” said Mike Lafferty, president of Indian River County’s Brokers’ Association. “Demand is demand … and sometimes prices will just keep rising. There’s really no end in sight.”
Buyers are moving fast too. Since February, the average sales times – from listing to closing – have decreased by the following:
- Martin: 27.2%, after 59 days
- Indian river: 20.5%, after 62 days
- St. Lucie: 18.2% after 54 days
Commercial market
The commercial real estate market follows residential stats, said Anthony Gambardella of the Realtors Commercial Alliance of Broward, Palm Beaches and St. Lucie.
As more and more people move to the area, the workforce also increases and requires additional warehouses, offices or commercial buildings.
Commercial property owners and tenants are now seeing the effects of the real estate boom, Gambardella said – and increased rental rates to meet high demand from the low supply market.
“Rent will always go up when supply is very, very low … We are not replenishing inventory fast enough to keep prices the same,” said Gambardella, a 32-year-old industry veteran based in Port. St. Lucie.
The owner of Vine & Barley said a 50% rent increase, for example, will force him to close the craft beer and wine bar in downtown Stuart in September. The South Florida landlord, who said the increase was only 30%, said it had to adjust to the current market.
Inventory problems
St. Lucie County has more than 5 million square feet of commercial space The groundbreaking should take place by the end of the year, said Gambardella. But things may not go as planned.
This year, supply bottlenecks in the construction industry have increased prices, delayed deliveries and extended project times.
Richard K. Davis Construction recently waited 26 weeks for a window delivery that would normally have taken six weeks, Davis said.
The problems got progressively worse over the course of the year, Davis said. The uncertainty surrounding prices and availability is creating an unpredictable market that is now turning.
“You’d think that would bring the market to a standstill, but it isn’t,” he said. “People are still willing to wait and pay more. I wonder … the phones keep ringing.”
Do local residents have to worry?
High demand is a double-edged sword for local businesses, said Mark Brechbill, president of Main Street Stuart.
It’s great that the Treasure Coast is a sought-after area, Brechbill said, but investors outside of the city could crowd out long-time residents as costs rise.
Brechbill remains confident that with the influx of new residents, local businesses can generate more revenue to offset higher rents, he said, but that hasn’t happened yet.
“What happened was good – good for the local real estate market, good for local business,” he said. “But it’s a concern that others need to keep track of because it could change.”
Catie Wegman is the community reporter for TCPalm. You can contact Catie on Twitter @Catie_Wegman, on Facebook @ catiewegman1 and by email at [email protected].
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