Is the Land Market Recovering in SW Florida?
Date: Wednesday, March 24, 2010

Is the Land Market Recovering in SW Florida?

At Land Solutions, that is a question that we are asked nearly every day and the answer can be yes or no, depending on what type of land we are talking about. We have seen an increase in the number of improved and unimproved residential land sales, indicating we may be seeing the bottom. However, commercial and industrial land sales may still have a way to go before reaching the bottom. Let's see what the market tells us.

There have been several significant residential land transactions in the last 90 days, with purchase prices less than what we saw residential land sell for in the late 1990's before the housing boom. Builders and developers have liquidated their excess land and lenders are selling through the inventory of distressed properties they acquired. While we have not seen an increase in price, we do see the residential land market leveling off. Details on some of the notable transactions from the last six months are provided below.

We are also seeing residential builders cautiously begin soft takedowns to acquire lots for model and inventory homes in subdivisions that are financially sound and in good condition. However, those communities troubled with CDD debt, bankrupt or struggling HOAs and having expired or challenged permits still have a long wait ahead of them. We will discuss this more in our next newsletter.

We are just starting to see commercial and industrial land tracts going into default and entering the foreclosure process, indicating prices have yet to reach the bottom. Lenders are assembling their special assets and REO teams in preparation for the flood of distressed commercial properties soon to enter the market.

With that said, most if not all land transactions in today's market have been sold to buyers who have cash readily available and do not require financing, which is essentially non-existent in current market conditions. The pool of these buyers is limited; therefore, they are seeking purchases at highly discounted prices, based on the fact that they may have to hold / carry the asset for 3-10 years or until the market corrects itself. Therefore, with the rare exception of an end user having a particular use in mind for a specific property; only those properties priced at or below market value are trading.

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What's Selling at What Price?

• 2/5/10 - Colonial Homes to Lennar Homes - 5 model home lots in Moody River Estates, Hancock Bridge Pkwy., North Fort Myers, FL  sold for $197,500 or $39,500/lot
  
• 2/17/10 - Tousa to Starwood Land Ventures - 454± lots in five Lee County communities sold for $5.789M or $12,750/lot
  
• 2/18/10 - RC Properties (GMAC) to BB Road, LLC - 690± zoned acres on Bonita Beach Rd., Bonita Springs, FL sold for $8M or $11,600/acre.  Transaction included 724± acres on/off site mitigation land in Lee and Hendry Counties
  
• 11/6/09 - RC Properties (GMAC) to DR Horton - 15 residential lots in Palmira Golf and Country Club, Bonita Beach Rd., Bonita Springs, FL sold for $675,000 or $45,000/lot
  
• 9/2/09 - MDG Forum 6 to DR Horton - 6 residential lots in The Forum, Colonial Blvd., Fort Myers, FL sold for $204,000 or

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Recent Headlines 

Amendment 4

While November will be a busy election season, no issue on the 2010 ballot will be more important than Amendment 4. In this tough economy, the last thing Florida needs is an irresponsible amendment that will cost jobs, raise taxes and make it more expensive to live in our state.  But that’s exactly what Amendment 4 will do.

Please click on the link and take a moment to view this 2 minute video on St. Pete Beach, the first community in Florida to adopt a local version of Amendment 4.

Link to video
(Source: Florida Home Builders Assn., 3/11/10)

Lee population set to take off again - Could top 1 Million by 2035

Bill Homsher and his wife can't wait to move to Lee County. The couple has a farm in Ohio, but residing in sunny Florida was always their dream. "We decided on Lehigh Acres because my wife's sister and both brothers live there," Homsher said. "We have always wanted to retire in Florida, and the home prices in Lee County helped us decide to move there."

Read More...
(Source: The News-Press, 3/3/10)

 Confidence in Florida Land Again

In a sale that may strongly signal the stabilization of Florida's troubled residential real estate market, Starwood Land Ventures, LLC and Lennar Corp. finalized the purchase of 5,449 residential lots and 36 model homes in 38 Florida markets from Tousa, a land developer based in Hollywood,FL, that filed for bankruptcy in 2008. These land holdings constitute one of the most desirable real estate portfolios to come to market in years.  

Read More...
(Source: CoStar Group, 3/3/10)

 Experts say Lee Co. overpaid in $36.6M Conservation Land Buy

Lee County is paying $36.3 million for its latest conservation land purchase -- as much as six times what independent experts say the land would sell for on the open market. Two county-hired appraisers said the land, for which the county paid $30,000 an acre, was worth even more, but many of the sales they used as comparisons for the appraisal were other county buys or were completed as long ago as the height of Lee’s real estate boom.

Read More...
(Source: The News-Press, 2/28/10)

 By the Numbers / February Residential Permits