Florida Construction Resisting Ill Effects of Bankruptcy

In Ft. Myers, Florida, Lee County the bankruptcy rates are as high as they are anywhere in the state. In fact, it’s at the top of the list.

The recession has hit Florida hard, and Lee County as much as any as real estate prices fell and jobless rates stayed high.

But in a twist, the construction industry in the county is resisting the ill effects that have led to so many bankruptcy filings in Florida, according to the News-Press. The home building and home-selling industry, despite the foreclosures that clog the marketplace and the tough economy, is still flourishing in the high end of the market.

The news comes from a report released by the Federal Deposit Insurance Corporation and its Regional Economic Conditions data.

According to the report, Lee County was first on the list of counties in Florida in terms of personal bankruptcies per 1,000 residents, with 7.7 bankruptcies per 1,000 residents. The runner-up on the list is Osceola County, which contains Kissimmee and St. Cloud, which registered 7.44 personal bankruptcies per 1,000 residents in 2009.

Despite these figures, and the housing crash that has accompanied the economic recession in Florida and Lee County, the homebuilding business continues to churn out single-family homes and remain fairly high on the list of counties in terms of the number of permits for such home. Lee County comes in sixth on the list of counties in terms of the number of these single-family permits in the first three quarters of 2010.

Florida bankruptcy lawyer Carmen Dellutri, of Ft. Myers, had a strong assessment of the bankruptcy situation in Lee County, which has continued despite the slightly less bruised housing market.

“What it’s really coming down to is jobs,” she said of all of the personal bankruptcies. “The numbers are up, there’s really no doubt about that,” she told the News-Press.

Dellutri went on to explain that fewer people were choosing Chapter 13 bankruptcy as a debt relief option. In Chapter 13, debtors create a debt repayment plan over three to five years, under the guidance of a bankruptcy trustee.

Instead, according to Dellutri, “more people are opting to go Chapter 7 bankruptcy and bite the bullet. I think times are getting harder in Southwest Florida.”

Brad Hunter, the director of research at housing market data company Metrostudy, told the News-Press that expensive homes are doing better than stripped down home models.

“What we’ve seen,” he said, “is a very dramatic drop in the inventory of new homes over the past few years that allows builders to justify increasing their production.”

Hunter noted that it was hard for builders to make a profit on homes that sell for under $150,000. For that reason, new construction on more expensive homes continues to rise, even as the economy stays down.

Another analyst predicted that once the economic recession eased, there would be a lot of new construction in areas where projects were halted. That way, empty lots with infrastructure already in place would be ripe for new construction, said Michael Timmerman of Fishkind & Associates in Orlando, Florida.

Tim Rose, a builder in Lee county, said he and his peers were happy with the modest increase in business. “At this point nearly anything seems like a ray of sunshine,” he said.

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