While the real estate boom in Florida has cooled somewhat in the past year, it didn’t temper the turnout for the annual Lay of the Land Conference, which is hosted by SVN Saunders Ralston Dantzler Real Estate. The Feb. 23-24 event drew record attendance to the recently opened Bonnet Springs Park event center in Lakeland, Florida. The event hosts speakers covering financial and real estate trends. The Lay of the Land 2022 Market Report also was released at the meeting.
Real estate (residential and commercial) transactions have slowed in the past year, driven by inflation and higher interest rates. While most speakers at the event said a recession was likely, Florida is in a better position to weather the storm than many other states. And everyone agreed Florida lenders are not over-leveraged like in 2008, so another Great Recession is not in the cards.
Dean Saunders, founder and managing director of SVN Saunders Ralston Dantzler Real Estate, said three words come to mind when discussing 2022 — recovery, reality and reflection. He discussed recovery from the economic policies enacted during the pandemic, the reality those policies had on the economy and reflection on those events and where Florida is headed in the coming year.
Saunders said the government’s pumping of nearly $5 trillion into the economy during the pandemic inevitably created an inflationary environment. The Federal Reserve has responded by hiking interest rates at an unprecedented pace.
“All of this led to fewer real estate transactions during the year (2022),” Saunders said. “However, the average price per unit for real property increased.”
Saunders emphasized this is not another 2008 scenario. An average of 1,142 people moved to Florida daily in 2022. These people are bringing wealth to the state. The state netted 20,000 new high-net-worth households last year, making Florida No. 1 in the United States. This should help insulate Florida from a substantial economic downturn and has set the state up for significant growth.
While overall real estate slowed, there was still significant activity in the Florida farmland sector. The market report tracked 61 transactions in 27 counties in the state. Most of these farms consisted of fruit and vegetable production, irrigated fields, sod farms and acreage dedicated to growing various other commodities.
Citrus land sales are tracked separately from other farmland sales and continue to be a big part of agricultural land transactions in the state. There were 107 citrus sales included in the 2022 market report. The value for these citrus transactions totaled $149.7 million. The average value of these 2022 sales was $8,645 per gross acre and $10,807 per net-tree acre. This is higher than sales activity in 2021.
Movement in citrus land sales is driven by the effects of HLB. Seasoned growers, investors and vertically integrated growers/processors/packers make up the bulk of buyers in this environment. Citrus groves also have become attractive for residential and commercial development.
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