Land Prices are Skyrocketing in Southwest Florida
In much of Southwest Florida, per square foot prices for vacant residential lots have reached a record high. The shortage of available homes for sale in the region have tempted more and more buyers to purchase a vacant lot and hire their own homebuilder to construct their new home. This frenzy of building has served to raise land prices to astronomical levels, particularly in Collier County.
According to the Naples Daily News, in August of this year, a buyer purchased a one-acre vacant lot with 158’ of beach frontage for $18.05 million in Bay Colony. The lot fetched more than any other in the community’s history.
Also, earlier this month, a lot in Old Naples was listed for $18.9 million. The lot would have room for a 1,6000 square foot home. And amazingly, while the home would have water views of the Gulf of Mexico, it is not beach front.
As a final stunning example of the buying binge, a lot of less than ¾ of an acre on Gordon Drive in Naples that sold for $13.9 million in January of this year, sold for $18.9 million six months later – that’s a $5 million profit in a few months for the seller – not too shabby.
Even in the more affordable areas like Golden Gate and Golden Gate Estates in Naples, prices have risen dramatically.
Low inventory of existing homes for sale are yielding record setting land prices.
What’s true in Naples also holds for Marco Island. In the upscale Heights Court, a waterfront, residential lot went to contract this month for approximately $6.3 million. When the purchase is finalized, it will likely set a record for a lot on Marco Island.
Also on Marco Island, a lot on Hideaway Beach set the current record of $5.5 million in June of 2021. Jim Prange, a broker with Sotheby’s International, said that a few years ago that same property would have sold for a million or less.
In Cape Coral, waterfront lot prices are up an astonishing 70% since just last year.
In Port Royal, a mansion sold for $52 million in January – a record price for Collier County.
According to News-Press, the Southwest Florida real estate market is “white hot, .. the likes of which has never been before in Southwest Florida.”
Market Watch recently held a symposium at the Hertz Arena in Estero. The speakers represented some of Southwest Florida’s most experienced brokers, property appraisers, builders, and economists.
The event sponsored by News-Press and the Naples Daily News, featured David Cobb, a regional director of Zonda Advisory, as the keynote speaker. “Cobb shared that his company’s index, which tracks the demand for homes, ranks the Naples area as the fourth highest in the country, based on 150% increase in activity over [the] last year.” The index looks at pending and actual sales.
Those out-of-state buyers are bringing "buckets of cash" with them, and they have 30-40% more purchasing power here, Cobb said, due to the much higher housing prices in the places they're coming from.
So, even with skyrocketing prices for homes and vacant lots, Southwest Florida is still considered a bargain when compared to some other markets.
But with the secret becoming known, it’s probably only a matter of time until Southwest Florida reaches the land and home values of the most expensive areas in the country.