Florida Land Values Strong Thanks to Rising Economy
Improving economic conditions are showing up in the results of the seventh edition of the “Lay of the Land Market Report.” The report provides an accounting of verified land sales from 2017. The update was released in April during the annual Lay of the Land Conference held at Champions Gate near Orlando.
Dean Saunders, owner of Lakeland-based Coldwell Banker Commercial Saunders Real Estate, publishes the report and hosts the conference. He said the real estate market is firing on all cylinders with elevated activity in all sectors of the market.
“Overall, the residential land market in Florida is very strong as a result of the improving economy, combined with the continued influx of almost 1,000 people per day to the state,” Saunders said. “As demand for residential development land increases, sales of agriculture land in the paths of progress increase. With the capital earned from selling land for high development prices, sellers are reinvesting in other rural agriculture land.”
The heart of residential growth is occurring along the I-4 corridor from Tampa to Daytona Beach. Jerry Parrish, Chief Economist for the Florida Chamber of Commerce, gave some perspective on the growth during the conference, noting that from Jan. 1 to April 6, 83,524 people had moved into Florida, and the state’s adjusted gross income grew by $2 billion. People from New York, New Jersey, Pennsylvania, Ohio, and Connecticut (in that order) lead the migration into the state.
The real estate market in the Treasure Coast (Indian River, St. Lucie, Brevard, Martin, and Okeechobee counties) is hot. In Indian River County, 5-acre ranchette lots sold at the bottom of the market in the $10,000 to $12,000 range. According to the report, prices are strongest in Martin County with a few sales in the $25,000 to $50,000 range for home sites of approximately 5 acres.
The region’s citrus industry continues its tailspin in the face of HLB and the devastation brought on by Hurricane Irma.
Grapefruit production estimates continue to fall with the May USDA forecast at less than four million boxes.
Citrus groves that are no longer productive are selling in the $3,500 to $5,300 per acre range, while better producing groves are fetching $5,000 to $8,000 per acre.
Other Citrus Lands
Prices for citrus land ranged widely in 2017 in other production areas, according to the report (Polk, DeSoto, Hardee, Hillsborough, Manatee, Highlands, Lake, Collier, and Hendry counties).
Typical buyers were skilled and seasoned growers. While the report didn’t account for sales for residential or commercial development, groves in the path of development are highly desirable. There is demand for higher-quality, better-producing citrus groves. Marginal groves are in demand where alternative crops are desirable.
Approximately 10,994 gross acres and 9,252 net-tree acres were included in 90 selected 2017 sales in this area totaling almost $70 million. The sale prices ranged between $2,500 and $15,000 per gross acre. Net-tree citrus-acre sales ranged between $2,500 and $17,067 per acre. The average for the sales was $6,278 per gross acre and $7,461 per net-tree acre. The midpoint was $6,688 per net-tree acre. The 2017 price per net-tree acre and price per gross acre are both approximately 4.5% less than in 2016. The volume of acreage sold is approximately 5.3% less than in 2016.
In Hillsborough County, there was some activity with seven sales that comprised 90 gross acres. The price per gross acre ranged from $10,417 to $33,500 for the seven farms sold.
There were three additional sales of farmland for transitional uses in southeastern Hillsborough. Two of these farms were sold for solar farms: one for $18,278 per gross acre and $22,262 per upland acre and the other for $30,771 per gross acre and $31,518 per upland acre. Another sale for high-density residential went for $77,778 per gross and upland acre.
There were two sales in the Plant City and Dover growing areas. A tract that went from strawberry farmland to a solar farm sold for $23,936 per gross acre and $34,622 per upland acre. Another strawberry farm that went to commercial development sold for $125,000 per gross and upland acre.
Farmland sales in Hillsborough reflect continual market shifts into transitional uses. Pressure from urbanization has continued to creep into farming country.
Central Florida Sales
According to the report, there were five notable sales of vegetable farmland in 2017. Quality irrigation land prices remained stable in the area.
Okeechobee County farm sales ranged from $4,849 per upland acre, where conversion from citrus was required, to $7,080 per upland acre for a turnkey farming operation.
The largest farming purchase was in western Manatee County for $6,169 per upland acre. In Polk, Highlands, Hardee, and Okeechobee counties, farmland prices ranging between $5,000 and $7,500 per acre were prevalent.
Institutional investors continue to seek out grower owners willing to sell land for lease-back arrangements on the property.
Everglades Ag Area
Sales of property in the Everglades Ag Area (EAA) were down in 2017. While prices have been increasing in the region, there were only two notable sales last year. One sale was within Palm Beach County and the other one was in southern Glades County. Lands in the central region of the EAA, within Palm Beach County, are the most desirable with prices exceeding $11,000 per acre.
Demand for agricultural lands within the EAA has been high the last few years, but the market’s inventory remains tight.
The land values report tracked residential sales in 17 counties in Florida. Development continues to heat up in the state, particularly around major population centers of Central Florida. Fifteen of the 17 counties showed moderate-to-high finished lot sales activity.
The price for useable, residential land was up 19%, averaging $56,672 per acre. Land values ranged from $223,208 per acre in Martin County to $18,831 in St. Lucie County.