Florida Land Values Get Upbeat Assessment | TheLedger.com

Published: Wednesday, April 10, 2013 at 12:01 a.m.

Last Modified: Thursday, April 11, 2013 at 4:32 a.m.

"Asked a year ago, I said we were in a mini-recovery. I can tell you now, with a lot more confidence, we're in a recovery," said Brad O'Connor, a research economist with the Florida Realtors in Orlando.

O'Connor and four other real estate and financial authorities gave a generally upbeat assessment of the state's current real estate market at the "Lay of the Land" seminar hosted by Coldwell Banker Commercial Saunders Real Estate of Lakeland recently. About 160 major agricultural and commercial property owners attended the seminar at Mosaic Co.'s new Streamsong Resort in southwest Polk County, said Dean Saunders, the real estate company's president.

While the market in agricultural and commercial properties was moderate last year, Saunders said the outlook going forward is encouraging.

Jess Cusson, an agricultural and commercial land specialist at Saunders, released a report at the conference that agreed.

"Recovery in the real estate market is historically led by a rebound in the housing markets and the strengthening in the markets in our metropolitan areas. This recovery does not appear to be an exception," Cusson said.

The I-4 corridor in Central Florida, which includes Polk, performed near the average for the state's various regional housing markets during the last decade, O'Connor said.

Housing prices peaked in 2006 followed by a roller-coaster-type decline over the next three years, he said.

"The crash stopped" in 2009, although average home prices continued to decline until 2011, O'Connor said. In Polk, the median home sale price reached $150,000 in February, up about $30,000 since the beginning of 2011.

"Prices have stopped declining, and in many areas they are steadily increasing," he said. "It's a pretty healthy market now, all things considered."

Saunders reported the average value of Florida cropland in 2012 fell 5 percent to $5,730 while pasture lands declined 4.4 percent to $4,300 per acre.

The trend in agricultural land values generally lags behind performance in the residential market by two years, he said, and farm prices for the crop grown on that land plays a major role in its value.

The markets for citrus and strawberry land performed better than average last year because of strong farm prices in those sectors, Saunders reported.

There were few sales of strawberry land in the Plant City area last year, but those that did sell got prices between $19,000 and $36,000 per acre, he said.

Last year, the state had 85 sales of citrus properties totalling 14,531 acres, including 10,735 acres with citrus trees, for a total purchase price of $114 million, Saunders said. That's an average $10,633 per acre for a grove.

Florida citrus acreage has declined 36 percent since 2000 from losses to disease, particularly citrus greening, hurricanes and development pressures, he said.

That trend may be reversing as growers are buying citrus properties with the expressed intent of replanting, Saunders said. The growers are responding to incentives from the state's juice processors, who buy most of the annual citrus crop and are concerned about the industry's long-term viability as fruit supplies dwindle.

Citrus growers who attended the seminar agreed their industry is poised for a turnaround during the next decade.

"I'm pretty bullish on the long term in the citrus industry," said Baxter Troutman, a Winter Haven-based grower. "People in the citrus industry have been forced to deal with calamities for the past 100 years. I firmly believe there will always be citrus industry in Florida. It will be a different industry, however."

Troutman agreed citrus growers are looking to replant in response to processors offering long-term contracts for new orange groves of up to 20 years with minimum or "floor" prices reaching $2 per pound solids, a measure of how much juice is squeezed from the fruit.

This season's average farm price for early and mid-season oranges, picked from October to March, is $1.42 per pound solids, according to Lakeland-based Florida Citrus Mutual, the state's largest growers' group. It projected the average farm price for Valencia oranges, harvested through June, at $1.58.

Troutman said he came to the seminar out of interest in investing in land for new groves.

"I'm an agriculture guy. I always have been, and I always will be," he said.

Mark Wheeler, Citrus Mutual president and a Lake Placid-based grower, agreed the outlook for turning around the decline in citrus acreage looks good. Wheeler also agreed he and other growers are responding to market incentives for replanting.

"That is the reality. People want to see a return on their investment," Wheeler said. "If we continue to see a (farm) price in the $1.60 to $2 range, I think we'll see a bump in acreage in the next five years."

[ Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-401-6980. Read more on Florida citrus on his Facebook page, Florida Citrus Witness, http://bit.ly/baxWuU. ]

Source: http://www.theledger.com/article/20130410/newschief/130419957

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