AKELAND, FL, March 5, 2020 – “The economy looked great in 2019 and the expansion continues,” Dean Saunders states in the introduction to the Lay of the Land 2019 Market Report. Saunders is founder and managing director of SVN | Saunders Ralston Dantzler Real Estate. The market report was issued at the Lay of the Land Florida Land Conference Feb. 27-28 in Lakeland.
Florida benefits from ongoing net in-migration of 900 people per day and population growth second only to Texas, Saunders states. “They come here for the reasons they have always come – sunshine, water and low taxes,” he writes.
“The Lay of the Land Market Report continues to be the single source of verified Florida land sales information,” Saunders continues. “We partner with a network of appraisers and land professionals to vet the data and bring you accurate information. The result is the most comprehensive view of Florida land values in the industry today.”
A brief summary of 2019 sales and trends by land category follows.
RANCH AND RECREATION LAND
In 2019, the company analyzed 21 ranch or recreational sales of over 500 acres. Sales totaled $166 million on 43,743 acres for an average sale price on unencumbered ranch/recreational land of $3,991 per acre. This is a 15 percent increase over 2018 values.
The company also tracked many ranch/recreational sales of between 100 and 500 acres. The average price for the 40 transactions reviewed is $5,296 per acre, which is a 33 percent premium for the smaller tracts when compared to the larger tracts.
RESIDENTIAL LOTS AND LAND
(Central Florida: Brevard, Hernando, Hillsborough, Indian River, Lake, Manatee, Marion, Martin, Orange, Osceola, Pasco, Polk, Sarasota, Seminole, St. Luicie, Sumter and Volusia counties)
Residential land and finished lot sales remained hot in 2019. Interest rates are low at just over 3 percent and demand is high.
In 2019, prices for residential land were up 4.7 percent overall from 2018 for confirmed sales in the 14 counties in this report. Finished lot prices for confirmed sales were up 14.3 percent in the 17 counties studied.
The average price for residential land purchased in 2019 in the 14 counties studied was $43,852 per gross acre and $53,437 per upland (usable) acre. This upland per acre price is up $2,397 per acre from the 2018 average of $51,040 per upland acre. This is a 4.7 percent increase in value overall.
Orange ($88,722), Sarasota ($76,928) and Seminole ($73,144) counties had the highest value per acre. Osceola (1,964), Orange (1,630) and Hillsborough (1,232) had the most acres sold.
The average price for a finished single-family residential lot in 2019 for the 17 counties studied was $59,388. This is up $7,418 per lot from the 2018 average for a 14.3 percent increase in value.
The counties with the highest per lot value were Orange ($78,385), Pasco ($73,399) and Sarasota ($72,715). Seminole County had values of $155,149 per lot and Martin County was $153,363 per lot, but there were only 57 and 67 lots, respectively, sold in those counties. The counties that sold the most lots were Polk (1,326), Hillsborough (1,100) and Lake (874).
This report only concentrated on bulk sales of five or more lots purchased at one time, not individual lot purchases.
CENTRAL FLORIDA FARMLAND/CROPLAND
(Row crops in Hillsborough, Manatee, Polk, Hardee, DeSoto, Charlotte, Highlands, Okeechobee, Lee, Hendry and Collier counties)
Annual sales in 2019 far exceeded those of 2018. One large sale of 35,652 gross acres in Hendry County yielded 20,732 acres of farmable land.
Hillsborough County topped the list for the number of irrigated farm transactions with 11 sales consisting of 396 gross and 313 farmable acres. Hendry was the top-ranking county with total acre sales of 36,143 gross and 21,005 farmable acres.
Irrigated farmland values remained steady in the Heartland and have increased in the Southwest region and Hillsborough County. In the Heartland, Hardee County small farms sold for a combined total of 54 gross and 44 farmable acres for an average of $7,143 per farmable acre In the Southwest, larger-acreage farm prices ranged from $8,285 to $12,580 per farmable acre for vegetables. Hillsborough County continued to command the highest sales recorded; prices ranged from $20,745 to $39,993 per farmable acre for strawberries, yielding an average $28,183 per farmable acre.
Future trends to watch for farmland and cropland sales and leases are the impacts of the industrial hemp industry and recent trade agreements. Licensing for industrial hemp will begin in 2020, and the recent USMCA and U.S.-China trade agreements will affect agriculture in the state.
(Polk, DeSoto, Hardee, Hillsborough, Okeechobee, Manatee, Highlands, Lake, Collier and Hendry counties)
Grove sale sizes reported for these counties ranged from 5 to 1,500 net tree acres. The average size of grove sales was 69 net tree acres with a midpoint of 30 acres. Approximately 5,731 gross acres and 4,666 net tree acres were included in 68 selected 2019 sales totaling $48 million. The net tree citrus acres have a range of $3,532 to $15,464 per acre. The average for these sales was $8,442 per gross acre and $10,369 per net tree acre, with $8,000 per net tree acre as the midpoint.
The reported sales include a large citrus grove transaction in north Hendry County. That investment-grade citrus grove sold for $22.75 million and consisted of 2,160 gross acres and 1,500 net tree acres. The price was $10,532 per gross acre and $15,167 per net tree acre.
For all sales, the 2019 price per net tree acre is approximately 31 percent higher and the price per gross tree acre is 23 percent higher than in 2018. Most of the increase is due to the large Hendry County sale.
The volume of reported citrus acreage sold in these counties during 2019 is approximately 5,731 gross acres, a 4.8 percent decrease from 2018.
Citrus groves with ample production and desirable forward-looking fruit contracts are usually profitable. Citrus greening disease continues to be a challenge.
(Indian River District: Indian River, St. Lucie, Brevard, Martin and Okeechobee counties)
The citrus industry on the Treasure Coast has consolidated to a handful of fairly strong and hardened growers. Indian River grapefruit, famous as the highest quality in the world, continues a 25-year stretch of declining acreage. There has been some new planting of groves, with some growers encouraged by the newer varieties and rootstocks that appear to provide some level of tolerance of greening disease.
Many former grove lands continue to transition to solar power production. Non-citrus agriculture is expanding somewhat. A strong housing market in the area is keeping the sod and ornamental growers busy and some are expanding.
Sales were up in 2019 from the previous year; 10 timberland sales were verified. These sales ranged in size from 976 to 54,929 acres, with gross sales prices ranging from $899 to $1,788 per acre with an average sales price of $1,306 per acre. The average price is significantly lower than the 2018 average of $1,673 per acre, and is likely a reflection of the limited number of sales from which to draw data.
The largest sale verified was 54,929 acres in Bay County for $67.5 million or $1,229 per acre. This tract was just to the west of the area decimated by Hurricane Michael and sustained only minimal damage from the storm. Conversely, a 7,375-acre tract that was severely damaged by the storm sold in 2019 for only $899 per acre, reflecting the loss of most of the merchantable timber on the tract and high cost of clean-up to put the land back into production.
At the smaller end of the timberland spectrum (500 to 1,000 acres), there was increased interest in 2019 from buyers with a recreational and/or speculative investment intent.
Sales data obtained indicated that timberland values continued to remain strong in 2019 except for properties directly impacted by Hurricane Michael. Timberland prices are expected to remain strong in 2020 in areas not directly impacted by the storm.
EVERGLADES AGRICULTURAL AREA
The Everglades Agricultural Area extends south and east from the southeast side of Lake Okeechobee to the Broward County line. More than 500,000 acres in the area are cultivated in sugarcane, sod and vegetables.
Larger agricultural land sales decreased in 2019. There was only one notable sale, the U.S. Sugar purchase of 35,652 acres of two large non-contiguous tracts in central Hendry County. The sale price was $130.5 million, which comes to $3,660 per gross acre. The buyer had been leasing the land prior to the sale and purchased the properties for continued sugarcane production along with some areas used for vegetable row crops.
The other two noted transactions were not for agricultural use. The sale of 243 acres in eastern Hendry County for $37,835 per acre consisted of lands for vehicular storage. The other non-agricultural purchase of 140 acres in Martin County just west of Indiantown was made by Florida Power and Light for a solar field; the price was $14,000 per gross acre.
Several large and medium-sized agricultural-type land deals took place in the Homestead/Redland area in 2019. The sales researched consisted of lands in agricultural use with sizes greater than 40 acres. The properties consisted of improved farmland/row crops, tropical fruit groves and ornamental plant and palm tree nurseries. Sales of farmland and tropical fruit groves ranged from $26,667 to more than $70,000 per acre.
Two notable sales of transitional lands far exceeded typical prices paid for agricultural lands. A sale to a developer consisted of 71 acres for $456,044 per acre of improved farmland with single-family residential and townhome zoning within incorporated Florida City. Another sale of 52 acres for $398,058 per acre consisted of industrially zoned lands with U.S. 1 frontage.
The general trend in the agricultural industry of the Homestead region is a decrease in cropland and groves with an increase in nurseries and greenhouses. The robust residential real estate market of South Florida has buoyed the ornamental landscape nurseries and greenhouses with sales of foliage plants up 40 percent.
The sale of land encumbered with a conservation easement is referred to in this report as remainder rights. Seven remainder rights were researched. Five of the transactions were between $1,506 and $2,350 per acre.
The highest-priced remainder right transaction was a quail plantation in the Red Hills area of Florida. The final sale of 2019 was a smaller recreational tract in the Green Swamp region and brought $3,381 per acre after adjusting for the value of improvements.
Thirteen conservation easements were purchased by various government agencies in 2019. Almost 35,000 acres were protected at a cost of $35 million. The Natural Resource Conservation Service purchased six of the easements, the Florida Department of Agriculture and Consumer Services and the Division of State Lands each purchased three, and Polk County bought one.
Demand for conservation easements remains very high, but the supply of government funds remains very low.
One notable easement transaction was the state’s acquisition of 19,251 acres of Florida timberland for $332 per acre.
In 2019, at least 12 different governmental entities or conservation organizations purchased 44 different tracts of land totaling 38,405 acres for $135 million.
There were several notable purchases in 2019. The new Florida Cabinet bought 5,534 acres in Hendry County. The Nature Conservancy (TNC) acquired a 20,146-acre tract in Gulf County using money from the Gulf oil spill; TNC intends to donate the land to the state. Pasco County purchased 843 acres from Lennar Corporation for $22 million to complete a corridor it has been working on. Collier County purchased a 169-acre golf course for $29 million.
To download a copy of the 2019 Lay of the Land Market Report, visit layofthelandreport.com.