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By Terry Flanagan, Engage Estero’s Vice President, based on the data from The Regional Economic Research Institute (RERI) reports and information from the Lutgert College of Business at The Florida Gulf Coast University.  

The big picture: growth, but in a more difficult environment

Estero’s economy is inextricably linked to that of Southwest Florida. What makes the January Regional Economic Research Institute (RERI) report from Florida Gulf Coast University especially interesting is that it offers bold predictions. It focuses on practicalities and assesses how the regional economy is performing right now.

The takeaway is that the economy is still moving forward, but more slowly than in prior years. There is less discretionary spending, with more normal developments in healthcare and education, but greater problems in the housing sector. It’s less about boom or bust and more about adjustment.

What’s happening in spending: cooling, not collapsing

The recent report describes an economy growing at a “sluggish pace,” with mixed labor-market signals and households feeling the squeeze of tighter budgets. For Estero, this matters. Local commerce depends heavily on three overlapping forces: visitors arriving, seasonal residents returning, and full-time households feeling confident enough to spend.

The RERI dashboard shows that Lee County’s real taxable sales were $1.590 billion in September 2025, down 1.7% from a year earlier but up 0.9% from the prior month. That combination is what a “soft landing” often looks like on the ground. Spending isn’t falling off a cliff, but it’s no longer being pulled forward by optimism and easy money.

For Estero’s business owners, this is the operating environment that rewards clarity and value: tighter offers, clearer positioning, better follow-up. The customer hasn’t disappeared—the customer has become more selective in their purchasing behavior.

Tourism: demand is improving, but the story is uneven

Tourism isn’t a switch that flips on when the season starts; it’s a chain reaction: people travel → they book rooms → they dine → they shop → they return. According to RERI, Southwest Florida’s airports served 16.5 million passengers through November 2025, a 5.3% increase over 2024. This is a positive sign as the region heads into peak tourist season.

However, the story behind tourism is more complex. Lee County’s real tourist tax revenue was $3.7 million in November 2025, up 8.7% from the previous year but down slightly from the previous month. This suggests that while the season is still shaping up to be strong, price sensitivity is increasing and businesses are facing rising costs for insurance, labor, and repairs.

Additionally, some communities are still recovering from Hurricane Ian, which may lead to stronger demand, but certain areas may not have the capacity to accommodate it. For Estero, this matters because displaced demand from barrier islands often shifts to nearby areas, potentially leading to an uptick in visitors as some choose to stay closer to the mainland.

Jobs: softer momentum, shifting composition

The key takeaway for Estero residents is that Lee County’s unemployment rate reached 5.5% in December 2025, up 1.8 percentage points from a year earlier. While the job market remains mixed, this signals a shift in momentum.

In particular, RERI highlights that leisure and hospitality, which have been key drivers in recent years, experienced the largest year-over-year decline. On the other hand, sectors like education and healthcare remain resilient. This trend reflects the broader picture in Estero: visitor-driven industries may fluctuate with seasonality, but healthcare and education provide a steady baseline for the economy.

For households, the key takeaway is to proceed cautiously, not in panic. While some roles may see more hiring as the job market loosens, the risk of a broader spending pullback increases if layoffs spread to sectors beyond hospitality and tourism.

Housing: the return of leverage (and realism)

Housing is where Estero residents may feel the shift most acutely. RERI reports that existing single-family home prices in Lee County fell 2-7% year over year. This isn’t a one-off event but part of a broader market recalibration.

As of January 2026, Lee County had 12,332 active listings, a 2.4% increase from December. While listings are still below last year’s levels, the month-to-month rise signals a market with more options and greater potential for price adjustments.

For Estero, this means buyers have more breathing room, but sellers will need sharper pricing discipline. Transactions may take longer as insurance premiums and HOA costs become more significant factors in affordability.

What to watch next month in Estero

For Estero residents who prefer a simple “dashboard mindset,” keep an eye on these three key indicators:

1. Lee County Unemployment – Does the rate continue to rise, or does it stabilize?
2. Tourist Tax Revenue – Does demand remain strong, even with higher prices?
3. Active Listings and Pricing – Does inventory continue to grow, and where are price cuts clustering?

The Bottom Line: Moving Toward a More Normal Economy

The real takeaway from the January report is not doom and gloom, but adjustment. Estero is transitioning from the post-pandemic boom to a more stable economic environment, one where outcomes depend less on external tailwinds and more on decisions. What households choose to spend, what businesses choose to offer, and how confidently the region continues to build around its two economic anchors, healthcare and education, without overly relying on tourism or leisure to drive the whole economy.