With almost 1,000 new residents arriving every day, Florida is in high demand when it comes to housing. Development land therefore forms a fundamental part of the market. As a result of the demand, Florida land prices are performing well. A recent report forecasts another year for growth in 2019.
The drivers
The Lay of the Land published by Coldwell Banker Commercial Sanders Real Estate takes a comprehensive look at the market for Florida land. The company recently presented the latest edition with statistics for 2018 in Orlando.
The drivers behind Florida land prices are the same as those pushing forward the housing market generally. The strong state economy attracts in the region of 1,000 new residents on a daily basis. Unemployment at below 4% is another decisive factor in the state’s growing population.
“The rising tide of our growing population floats all boats,” said Dean Saunders, the founder of the report at its presentation. “All sectors are doing pretty well.” He stated that Florida land remained strong throughout 2018 and predicted more of the same for 2019. “This year marks another positive year for growth with land values holding steady,” he said.
Residential building
A clear indication of the strength of Florida land prices lies in the boom in residential building across the state. According to analysts, builder confidence has increased for single-family home. They base their optimism on the tandem of low mortgage rates and booming job creation.
The Lay of the Land reported that prices for land for residential development averaged in the region of US$50,000 per acre. According to Saunders, this equates to a 14% rise over the last four years.
“There is more demand out there than supply,” he said, but also stated that there’s good supply in the pipeline in the entitlement process. In his opinion, this will mean “higher values for lots and houses”.
Florida land types generally
The report estimates that there are around 11.5 million parcels of land in Florida. Their total value sits at approximately US$3 trillion. The company believes the number of plots will increase in the near future as larger parcels are divided into smaller ones.
In terms of ranch land, the report states that prices average between US$4,000 and US$6,500 per acre. Strong demand from foreign buyers remains as does that from residential developers. They are reportedly buying up tracts of ranch land for future housing construction.
Citrus land makes up a large proportion of available land in Florida, home to one of the world’s largest citrus production markets. According to the report, Florida land prices went up by 5.8% in 2018 per net-tree area for this type of land and by 9.2% per gross acre. Like ranch land, citrus areas are also on the residential developers’ radar. There is, says Coldwell Banker Commercial Sanders Real Estate, continued demand for groves to be used as future housing developments.
(Source: Growing Produce)
