Florida Land Prices Are Rising

In a recent Wall Street Journal Online Article, they claim Land across the US is getting more expensive. While I can’t speak for the rest of the country, I can tell you about the Florida Land Prices because I have been posting about Florida Land Prices increasing for the past year, and have been telling all of the readers of this blog to Buy Florida Land.

I know a few of you have, because we email back and forth about deals, strategies, thoughts and observations. Those of you who have invested in Florida Land are now reaping the benefits of rising land prices and are on the automatic appreciation train.

Of course, now I get calls pretty much daily from people stuck in the prices of 6 – 12 months ago and they still think they can get a buildable lot in SW Florida for $2,000 or so. SORRY – those days are over, and they are now in the $3,500 (if you can find one) to $5,000 range.

Anyway, here is part of the Wall Street Journal Article below and a link to the actual article.

U.S. Land Gets More Expensive

Land values across the U.S. rose on average 13% in 2012, the first annual gain since 2005, according to estimates in a March report by Zelman & Associates, a housing consultancy. The increase was fueled primarily by growing demand among builders for finished lots, or ready-to-build home sites with roads, sewage lines, electrical-power hookups and other infrastructure in place.

For consumers, costlier land means more-expensive houses. Land cost constitutes 21.7% of the final sale price of a new home, according to the National Association of Home Builders. As land prices rise, builders tend to pass 100% of those costs on to consumers.

Click here for the rest of the article

The “Florida Real Estate market is on fire”

  Here are FIVE major trends in the Florida Real Estate Market:

1. Land prices. While the price of land continues to rise
quickly statewide, Orlando feels the most pressure. There are
some submarkets where “land and finished lot prices
have now surpassed peak levels.” In Orlando, we are seeing
developers buying raw land “just to gain a position and market
share.”

3. 55-plus market. There is a 20- to 25-percent jump in
potential buyers interested in active adult living, according to
builders in Southwest Florida. There is also a boost in
customer traffic in second- and third-tier markets.

4. Foreign buyers. It’s more than Miami! While in
Orlando, sales offices have three active
buyers: One from Brazil, one from Germany and one from China.
In North Port and Port Charlotte, we are swamped with Germans and Canadians.

5. Foreclosures. While the state has a notoriously long
foreclosure process, banks are slowly releasing
foreclosures. But investors continue to buy new foreclosures
shortly after they hit the market.

Florida Real Estate Market Update:
Continuing Positive Trends in Oct. 2012

Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in the Florida Real Estate Market in October, according to the latest housing data released by Florida Realtors®.

With Thanksgiving just past, we have a lot to be thankful for here in the Florida Real Estate Market

The state’s latest unemployment rate fell to 8.5 percent, the lowest in nearly four years – and combined with the momentum of the housing market, it clearly shows that the Florida Real Estate market is on a positive path and has been for months.

• Pending sales, closed sales and prices are trending up.
• Statewide closed sales of existing single-family homes up 25.3 percent compared to last year.
• Meanwhile, pending sales of existing single-family homes last month rose 56.7 percent over October or 2011.
• The statewide median sales price for single-family existing homes in October was up 9 percent from a year ago as well!
• According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in September 2012 was $184,300, up 11.4 percent from the previous year.
• Looking at the Florida Real Estate Markets  year-to-year comparison for sales of townhomes-condos,  statewide sales last month are up 16.4 percent compared to October 2011.
• Meanwhile, pending sales for townhome-condos in October increased 47.1 percent compared to the year-ago figure.

  The inventory for single-family homes in the Florida Real Estate Market stood at a 5.2-months’ supply in October; inventory for townhome-condo properties was also at a 5.2-months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply represents a market balanced market.

We Are Entering a Sellers Market Now
And When That happens, Prices Always Go Up.
The Florida Real Estate Market Has Recovered!

The interest rate for a 30-year fixed-rate mortgage averaged 3.38 percent in October 2012, down from the 4.07 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide Florida Real Estate Market housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the October report. Or go to Florida Realtors Media Center and download the October 2012 data report PDF under Market Data.

Results of the Presidential Election and What It Means To the Florida Real Estate Market

“Houston We Have A Problem”
Now that the election is over and we have who we have as president of the US for the next 4 years, I believe there will be HUGE swings in the Florida Real Estate Market on the whole, which will create HUGE PROBLEMS for some, while creating HUGE OPPORTUNITIES for others.
Depending on where you are positioned in the market how you view the market and what you do about it. Is your glass half empty or half full?

Taxes Are Going Up Folks — Make No Mistake About It.

We need to strategize from there knowing big tax increases are coming and, as Danny Devito famously said in the movie Other Peoples Money,
“You can make all the rules you want and when you’re all done, people like us …. We Adjust.”

We need to pay attention to what it was like with 38% Capital gains tax rates.

One more thing before I get into what I believe will happen with the Florida Real Estate Market.

I have this quote printed out and pinned to the wall alongside my desk. It originally came from an Anthony Robbins book and I made little additions along the way. The reason I am sharing this with you is this …. We humans tend to focus on the negatives from time to time and we all know “What you focus on expands”
By reading this regularly, it helps keep me in the proper frame of mind – feel free tp copy/paste to to a word document and put it on your wall as well.

So lets get going …
First, we know without a doubt the capital gains rate is going to increase on January 1, 2013. (less than 60 days from today), which is going to create a massive sell-off in the stock market.
There is activity already pointing to this.
People with brains will pull their money out of the Stock Market and pay the current 15% capital gains rate.

Once they have the money, they will need to do something with it and I believe, while some will put it back in the market at the new basis, others will buy gold, and the rest will buy Real Estate.

This massive sell off will itself create a whole bunch new of problems (un-intended consequences) and there just may be another TARP financial bailout to save the “Adjusted” stock market.
Can you say,‘takeover of the stock market?’

I have been seeing certain things over the past 6 months with hedge funds and investment groups, like Black Rock, “Giant Property Investor Gets Serious in Florida”  buying big into the real estate rental property market, both commercial and residential – I couldn’t put my finger on it until yesterday, the day after the election.
They are moving OUT of the stock market and INTO Real Estate because they see HUGE Changes coming and are “Adjusting”.

Do you see where I’m going here?
Big investment companies with deep pockets, who know nothing about real estate, are getting into the market. In my opinion, this will drive real estate prices up and by doing so, more will follow and prices will continue to increase.

Now lets take a little walk back in history to the Clinton Administration before Newt Gingrich became speaker of the house and created the “Contract With America.”

Capital Gains rates were in the 38% range and people had a very hard time selling their real estate because the tax bite was so massive. I remember people saying, “I can’t sell because after I pay the taxes, I won’t have any money left over” or “I can’t afford to sell because I’ll have to write a check for taxes and I don’t have the money.”

Think about this a minute -

• If people can’t afford to sell because of the taxes, they won’t.
• This will be a huge deciding factor and will remove a lot of properties from the market.
• Less properties on the market equals less inventory, and less inventory means higher prices.

Now lets look into what this means to you and me.

Florida Real Estate Prices Will Go Up. They Have To.

Historically, 22% of all retirees moved to Florida. Florida has always been a retirement state, but that is changing in a big way.
As the population gets older, they naturally gravitate to warmer climates.
Along with them, health care providers come to take care of them.
Communities spring up, and stores open up to serve the people of the communities.

Good stuff right?
Keep reading because this is going to blow your hair back ……

The current administration has this Green agenda going on and has pledged to put coal operated utility companies essentially, out of business.
By doing this, utility prices are going to sky rocket.
People living in the colder states will not be able to afford their monthly utility costs and I predict will move to warmer climates a well.

Places like Florida, where we can use the sun to create electricity and keep utility costs down, will flourish!

What does this mean?
Yep – you guessed it …. a BULL MARKET for the Florida Real Estate Market with increasing prices.

An old rancher is talking about politics with a young man from the city. He compares a politician to a “post turtle”. The young man doesn’t understand and asks him what a post turtle is.
The old man says, “When you’re driving down a country road and you see a fence post with a turtle balanced on top, that’s a post turtle. You know he didn’t get up there by himself. He doesn’t belong there; he can’t get anything done while he’s up there; and you just want to help the poor, dumb thing down.”

In Florida, we currently have a Governor who has slashed taxes, eliminated useless regulations and fired “post turtle” employees.

• He has implemented attractive incentives for businesses to locate to Florida.
• Florida is a “right to work” state so we don’t have to put up with Union Thugs.
• Did you know Florida is now the #2 state in America for job creation?

Yep – yet another reason Florida will continue to grow and grow.

Wrapping this up …..

• We have Billions of dollars from hedge funds moving into the Florida Real Estate Market.
• We will see properties removed from the Florida Real Estate Market because people will not be able to afford to sell due to taxes
• Florida is the #2 state in job creation and with jobs comes an increasing Real Estate Market in Florida.
• People are getting older and moving to warmer climates. Florida gets plenty of retirees and I expect we will continue to do so.
• No Union extortion.
• Abundant sunshine to power our homes and keep utility costs lower than other states.

Where do you think real estate prices are headed in Florida?
Please leave your comments in the comment section below.

In closing, I want to pay a special thanks to Doug G. from Austin, Texas.
Doug is an avid reader of my blog and has currently invested in over 400 vacant lots in SW Florida.
(Doug and I and have a mutual friend Ron G who lives in Englewood, Fl.)

Doug, I truly hope we will have the pleasure to meet one day, and if you feel so inclined, I would love for you to make a comment about the blog and how it has helped you make informed decisions on investing in Florida.

I am aware of the entry prices you paid and locations you invested in. …..
Up about 70% since May of 2012 – you done good …. keep up the good work.
The seeds are sprouting already …..  before you know it, you will be sitting on a a whole bunch of large, strong fruit bearing trees!”

North Port Lots and Land Report:

Monday, October 8, 2012 at 3:39 p.m. SOUTHWEST FLORIDA – via Herald Tribune

Building permits rose again during August in both Sarasota and Manatee counties, another sign the growing recovery in new home construction continued.

The number of permits for new buildings issued in the two counties rose 16 percent compared with August 2011.

The estimated value of the newly permitted homes was $51 million, an 8 percent increase compared with the same month last year.For the year through August, permits for new buildings jumped 34 percent in the two counties, while the estimated value of those planned buildings was up 38 percent.

To put it in dollars, the estimated value of homes permitted during the first eight months of 2011 was $332 million. For the same period this year, the figure is $458 million.

Growth was stronger in Sarasota County through the first eight months of the year, with building permits up 52 percent. That compared with a 25 percent increase in Manatee. Much of Sarasota County’s jump in permits came from North Port, where 127 buildings have been permitted so far this year compared with 72 during the same period last year. That marks a 76 percent jump for the city.

Sarasota saw a 50 percent rise in building permits, but the city is largely built out, so the numbers are much smaller. The city granted 30 building permits for homes during the first eight months of the year, compared with 20 for the same period last year.

But Sarasota’s new permits are for homes that are triple the value of the county’s average.

• The average new home this year has an estimated value of $749,900, 11 percent higher than last year’s average of $678,100.

Bradenton had been lagging the rest of Manatee in building permits, accounting for just 21 of the 843 permits granted during the first eight months of last year. But Bradenton permits more than tripled to 73 through the first eight months of 2012, while countywide permits were up 25 percent to 1,054.

http://www.heraldtribune.com/article/20121008/ARTICLE/121009648/2055/NEWS?Title=More-building-permits-issued-in-Sarasota-and-Manatee-counties

Breaking News for North Port and Venice Florida

Neal Communities announces 2,000 home community coming to River Road!

This is outstanding news for North Port and Venice Florida Real Estate.

The project — at the southwest junction of Center and River roads near Venice — also might signal that Southwest Florida is finally slipping the bonds of the Great Recession on its way to more normal growth.

IMAGINE what this is going to do to the North Port and Venice Florida Real Estate Market!

According to NAHB, there are 3 jobs created for every new home built. 2,000 homes x 3 = 6,000 potential jobs!
http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=103543&channelID=311

Whether you think the numbers are inflated or not

I cannot see any negatives in the news – Only Positive!!

The North Port and Venice Florida Real Estate Market is back.

What Do You Think It Will Do For Lot Prices and Sales??

Continue reading the article below:
http://www.heraldtribune.com/article/20120905/ARTICLE/120909800/2107/BUSINESS?Title=Pat-Neal-launches-2-000-home-Grand-Palm 

The Future of Vacant Land Prices in Florida

We are being constantly bombarded with reports of changes in home prices, as the housing market struggles to recover from its worst experience since the Great Depression.

Since these reports on home prices are coming out from samples by Case/Shiller, NAR, Zillow and others, it is important to take a few minutes and review the dynamics of the movements, so we do not become part of the “Kool-Aid” drinkers who are mislead by random news release. Further along we will go into detail on what it will mean to Vacant Land Prices in Florida.

First, we need to divide the home price discussion into two categories:

1. New Homes and
2. Resale Homes.

In the resale housing market, there is one seller for each home, which makes for a highly fragmented decision-making process related to pricing for that market.

If there are 5 million homes listed for sale throughout the country, or if there are 10,000 listings in a given market, it means that there is an equal number of decision makers who must decide to raise or lower the price of the “inventory” that is for sale.

This means, when the housing market turned down in 2007, the Resale market was slow to respond. Why is that? …because millions of home sellers were randomly deciding to lower prices, or stand firm. Once the light bulbs went on and the sellers got the message, they began slashing prices which created an almost “Lemming-Like-Mentality and prices plummeted.

Vacant Land Prices in Florida fell as much as 95%!

Now, as the Resale home market begins to recover, the sellers of Resale homes will be slow in moving their prices in an upward direction. Creating Great Opportunities for Investors. Further, any upward movement in Resale home prices will be mitigated somewhat by the influx of new listings into the market that is often a by-product of the improvement in home prices. Creating Great Opportunities for Real Estate Agents and Brokerages.

Resellers of homes have several factors to consider as they go through the selling process. The first is the value of the home (potential selling price) relative to the amount of the mortgage on the property. This is the “Equity Factor”; the factor that determines the limits to which the seller can lower their price and still come out whole. (Distress Sale & Bank Owned properties are not included.)

The Equity Factor actually has two components.

1. The first is the dollar amount of the equity the homeowner invested in the home at the time of purchase or over time through the funding of improvements (Cash Equity).
2. The second is the equity generated by appreciation in value over the time of ownership. (Time Equity)

Let me explain:

• The person who paid $250,000 for a home in 1998, with 20% down on a 30 year mortgage, that will sell for $450,000 today, could have as much as $150,000 Cash Equity and $200,000 in Time Equity.
• On the other hand, the person who bought a similar house next door in 2007, for $500,000, with 20% down, will have Zero Time Equity and only about $60,000 in Cash Equity.

In a price war, the 1998 owner/reseller has a significant pricing advantage. So, the 1998 owner/reseller successfully sells the house for $430,000, while the 2007 owner/reseller needs to wait for home prices to improve.


Then, there is the issue of Inventory (Listings) and Absorption (Closings). In a very weak market, sellers in the Resale market will take their homes off of the market and wait until the market improves. These discretionary sellers’ actions generate the illusion that the market is improving, because inventory is falling.

The video below is a great presentation by a spokesman of the Florida Realtors Assn.

The only solution to the falling prices in the Resale market is to generate more buyers. This will happen when there is more capital available to the single family residential mortgage market.

Now For the New Home Market:

New Home builder does not build homes to create a market. He builds homes in response to market demand.

As the crash began in 2007, in every market around the country, every new home that was built was already sold. There was so much easy mortgage money available, there were more buyers than there were new homes.

Many of the buyers were people who wanted to buy and live in a new home. However, a growing number of buyers in 2005, 2006 and 2007 were interested in buying a home before construction started and selling the home for a higher price when the home was finished.

All of those “sold” homes suddenly became builders’ excess Finished Inventory.

Meanwhile, the builder had bought more lots and had started more homes, because of all of the demand that was lined up at the door. Now the new home industry had a vast number of finished, unoccupied new homes, plus a pipeline of at least twice as many homes under construction. This vast oversupply forced builders to lower prices in order to liquidate this excess. Many builders who could not find buyers were foreclosed by banks, while others consumed their cash reserves by “taking a check to the title company”.

During this period, prices on homes plummeted and Vacant Land Prices in Florida fell off a cliff!

That was then, this is now. Today builder supplies of excess inventory have been liquidated in virtually every market throughout the country.

As a consequence, with no inventory, builders must build the next house they sell. Housing production is rising and, because the house has to be built, the builder is only interested in entering into contracts for prices that yield a profit.

What does this mean? Because builders have no inventory, they have to go out and buy it. Which means Vacant Land Prices in Florida are rising.

The next shoe is about to fall. As builders increase their production, they are consuming one of their most valuable assets; the Vacant Developed Lot. As builders struggle to replenish their lot supplies, they are finding that the prices of lots in quality locations are rising, because there is significant demand for these lots.

The Numbers:

• At the peak of the market in 2006, the land development side of the single family detached housing market was delivering 170,000 lots each quarter.
• By the second quarter of 2009, the lot delivery rate had dropped to 20,000 per quarter, and it has remained at this level for 3 years.

As the housing market continues to improve into 2013, the ability of the housing industry to ramp up lot development will lag significantly behind production.“Vacant Land Prices in Florida will increase.”

The end result will be significant upward pressure on vacant lot prices in SW Florida and home prices throughout 2013 through 2015. The primary determinant for the severity of the coming price increases will be the availability of equity and debt capital for the development of new lots, which is currently extremely tight.

What this means for the vacant land investor is this ….. Back Up The Truck and Begin Filling it with Deeds for Vacant Lots in SW Florida because Vacant Lot Prices in Florida are going up and will continue to go up for years to come.

Before I close this article, I want to leave you with a couple quotes from famous people, and an opportunity - 

Now for the opportunity: I currently have 30 lots available to purchase WITH OWNER FINANCING Available. YEP  - seller will finance anyone with as little as $1,500 down and small monthly payments. All the lots are in good locations – less than 5 minutes to a marina and launching ramp, about 10 minutes from a whole bunch of Golf Courses, and about 15 minutes to Gulf Beaches. Take a look -

Click the link and see for yourself ==> SellerFinanceFloridaLots.com

This post is about SW Florida Regional Real Estate Market. 

No spin – just factual graphs for you to review and decide for yourself whether it is time to buy or not.

As you will see, ALL signs are pointing in an UPWARD direction. The SW Florida Real Estate Market is making a come-back.

Avg Sold to Original List Price Ratio SW Region – as you can see, there is a steady upward trend in the asking to sold prices. It has been in an upward trend for the past THREE years.

Median Sold Price SW Region: As you can see in this graph, while there are high and low peaks and valley’s, the price TREND is moving UPWARD.

SW Region Market Activity: as you can see, there is a HUGE increase in pending sales (purple line) New listings are lessening and there is less and less inventory available. All signs of a stabilizing market and sure signs of price increases in the near future.

Florida Builder Reports 79% Increase in Sales Over Last Year

Homebuilder confidence at 5-year-high in August

LOS ANGELES – Aug. 16, 2012 – U.S. homebuilders grew more confident in the housing recovery in August, as many reported that prospects for sales are the best they’ve been since the home bubble burst five years ago.

The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday rose two points this month to 37, up from 35 in July.

The index, which is based on responses from 478 builders, has been trending higher since October and only dipped once since January. That suggests a turnaround in housing is solidifying after years of stagnation.

Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached that level since April 2006, the peak of the housing boom.

Homebuilders have mostly enjoyed improved sales trends this year, aided by low mortgage rates and a decline in the inventory of unsold homes. The pace of foreclosures slowed sharply last year, and banks appear to be holding back from flooding the market with foreclosed properties.

As confidence has increased, so has construction. Builders broke ground in June on the most new homes and apartments in nearly four years. And permits to build single-family homes rose to the highest level since March 2010.

Consumers also appear more upbeat about the housing market and are investing more in their homes. Home Depot, the nation’s largest home improvement retailer, said healthy sales of paint, bathroom accessories and kitchen installations helped lift its net income in the second quarter by 12 percent.

In August, builders reported seeing the best sales level since February 2007, according to a separate measure in the NAHB survey. Their outlook for sales in the next six months is at the highest level since March 2007. Turnout by prospective buyers, meanwhile, returned to levels not seen since May 2006.

And DePlaza anticipates sales will continue to strengthen, citing still-low interest rates and shrinking inventory levels of unsold homes.

“A lot of people sat on the fence the past several years and now they’re ready to make a move,” DePlaza said. People are feeling like the bottom has hit.”

The housing recovery has been subject to fits and starts. Sales of new homes fell 8.4 percent in June to a seasonally adjusted annual rate of 350,000 – the biggest decline since February 2011. That was down from a two-year high of 382,000 in May.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the NAHB’s data.