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Florida Land Values on the Rise

Posted by jarred on August 9, 2016
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Florida land values are on the rise. Below is an article from Tampa Bay Times Tribune Staff Writer Yvette C. Hammett. (Source: http://www.tbo.com/news/business/land-values-on-the-rise-in-sunshine-state-20160402/)

Land values are up in Florida, and agricultural land is a good, sound investment for those looking for such opportunities, land experts said Friday.

And because Florida continues to be an inviting place because of its climate and low tax burdens, it continues to draw foreign investors looking for a safe haven to stash their wealth during volatile political chaos, such as the current situation in Brazil, they said. It’s also continuing to see upward prices on residential real estate.

“Investments in agriculture are competitive and bring reasonable returns,” said Paul Genho, who for years operated Deseret Ranches in Florida and helped run the massive King Ranch in Texas before retiring recently.

“There has not been a decade since the 1920s, when you consider land appreciation and operational returns, that agricultural investments have not beat the standard,” he said.

“They are solid investments,” Genho said during the daylong Lay of the Land conference at Champions Gate, attended by hundreds of people involved in land sales, development and farming.

“Farmland in the last 10 years has had a 16 percent average return,” Genho said. “It has more volatility than it used to, but is still a whole lot less volatile than a lot of investments.”

Genho was speaking at the event hosted by Saunders Real Estate of Coldwell Banker Commercial, based in Lakeland.

Dean Saunders, who later presented his Lay of the Land 2015 Market Report, said people come to Florida for sunshine, water, great climate and a friendly business community. “We’re like 47th or 48th in the nation in terms of tax burden, so people want to come to Florida,” he said.

This state has 10 million individual land parcels available, valued at upwards of $2 trillion — up 10 percent over last year, Saunders said. Part of that increase is due to new construction, but it’s also because of valuation increases, he said.

“Land is considered a safer, tangible asset. I am seeing more interest from people from Latin America to come over here. People are looking for wealth preservation,” Saunders said. He spoke about a Portuguese family whose business was taken over by the government in 1974, then the family bought it back in 1994. They told Saunders they were only able to do that because they moved their money around and outside of Portugal. “They don’t want all their money in one place. They want diversification.”

Saunders sold that family a Florida ranch last year.

“You go to Venezuela and those guys want to get their money out of there as fast as they can,” he said. “That brings capital here.”

Croplands in Central Florida are selling for $5,000 to $6,700 per gross acre, he said, and in many cases, it is being leased back to farmers by investor buyers.

Migration to the state is keeping residential growth in demand, but builders aren’t keeping up, according to the Lay of the Land report.

“Our state’s positive job growth and an affordable cost of living are also playing a role in the increased demand for residential land to develop for single-family subdivisions,” the report said, but fewer developers are seeking to permit such tracts.

Residents, Saunders said, want to buy land in desirable locations rather than heading farther away from urban centers to buy in traditional subdivisions. “The primary buyers are the users. Investors have just about gotten priced out” in the more desirable locations, Saunders said.

Buildable land for residential development is selling for about $46,000 an acre, up 19 percent over last year, Saunders said.