An article on Inman News titled, Residential Lots: The Next Big Boom caught my eye today.  The article begins:

Over the past two years, in a number of markets stretching across the West, from Phoenix through Las Vegas to Sacramento and Riverside, investor groups have been maneuvering to acquire finished residential lots that due to the recession ended up stranded without hope like lost pilgrims in a vast desert.

For all my glass-half-full readers, unfortunately there was no mention of Cape Coral or Florida vacant land in the article.

One of the questions that I frequently get asked is when will Cape lots start appreciating again? The simplistic answer is that we need to work through the backlog of existing REO inventory before it will be economically feasible to build again in Lee County.  With over 20,000 properties in the foreclosure pipeline, this process is sure to last at least a couple of more years.  The other key issue, particularly in Cape Coral, is whether or not the community leaders have the where-with-all to attract new businesses and jobs to the community.  It is truly a shame that very little activity and intellectual capitol is expended on job creation by our community leaders.

Lee County should stock up on cheap lots, a county commissioner suggested.

Frank Mann said Thursday the county ought to buy discounted lots in Lehigh Acres, bundle them and sell the land for industrial and commercial development.

“We’re the only ones that can do this,” Mann said Thursday during a discussion on the Lee County budget. “Lots are as cheap right now as they’ve been in 25 years. … It could be one of the greatest economic tools we have.”

Source: News-Press Brian Liberatore (09/04/2009)

It is good to see some forward looking leadership in Southwest Florida.  Our plated communities of Lehigh Acres and Cape Coral have a dearth of commercial tracts.  This shortage of commercial land has severely limited the diversification of our economy as it has just been easier for builders to focus on more residential housing.

I am hopeful Lee County will move forward with this idea and maybe someone in Cape Coral will take notice as well.

Bye Bye First Homes

An ugly era in the annuls of Southwest Florida real estate history came to an end yesterday when Hovnanian sold the last 1,409 lots it owns in Southwest Florida. Hovnanian sold these remaining lots to a Czech investment group for about $3,000 each, a far cry from the peak value about 15X greater during the boom.

You may recall that Hovnanian was the NJ based firm that acquired local power-house builder First Homes back at the height of the market boom in 2005.  Many attribute much of the blame of the current SW Florida market woes to First Homes and others who built sub-par starter homes in remote sections of Lehigh and Cape Coral and agressively marketed them to unqualified investors. The acquisition proved to be a disaster for Hovnanian, as they missed their earnings projection the first quarter after the deal closed and have had financial difficulties since the acquistion.

Superstar Southwest Florida broker Frank D’Alessandro and his connected sidekick Samir Cabrera were shilling for First Homes with a very shady lease-to-own deal.  With superstar broker Frank D’Alessandro dead, his sidekick Samir Cabera heading to jail, Samir’s wife and TV Anchor Jessica Stillwell disgraced and off the air and Samir’s father-in-law former Lee County Manager Don Stillwell booted from office things have not gone well for this crew of First Homes pitchmen.

See you later First Homes, while you certainly were interesting to blog about, your legacy in Southwest Florida is not a good one.

Our Lot: How Real Estate Came To Own Us, a new book by Alyssa Katz, prominently features the Lee County real estate bubble.

The Lee County chapter focuses on the flipping that occurred in Lehigh Acres during the height of the market run-up. Anyone who participated in the Lehigh flipping frenzy will certainly want to read Katz’s take on this crazy period.

Today, a different sort of Cape Coral vacant lot solicitation was sitting in my mailbox. It was an offer from the Cape Coral Lot Owners Association to become a member. According to the letter, up-to-date lot sales information is the major value proposition of membership.

The irony of this value proposition for me is that this information is available for free from multiple different sources. Most Realtors will provide sales comp information at no charge. The Listingbook Service offered for free by Realtors will even allow you to get real-time notification of new listings or sales and not have to wait for a report. Also, the Lee County Property Appraisers site, www.leepa.org has a free report generator that can provde on-demand reports of vacant land sales by municipality or zip code.

With plethora of information currently available on the Internet for free, I am not going to part with $45 to join this association. I think that the model of charging for information that is readily available for free on the web has passed.

Babcock Ranch plans include a 19,500 home city and six million square feet of retail, commercial, office, civic and light industrial space. It will also be home to the world’s largest photovoltaic power plant, which will be operated by Florida Power & Light (FPL). FPL will seek approval to add 31 cents to every one of its existing customers electric bill to pay for this plant.

Yes, Mr. Kitson is correct, we absolutely need new jobs in the area. It is time for our political leadership to step up and focus on attracting the types of clean industries that Kitson is promising to already established commercial zones like around RSW. If there are federal funds coming to Southwest Florida for the green movement, lets fill in what has already been developed before we pave the eastern end of Lee and Charlotte Counties.

A new luxury community is emerging in South Fort Myers……introducing Hidden Harbor Preserve. Hidden Harbor features saltwater access boating to Estero Bay from a prime location in the heart of South Fort Myers.

Hidden Harbor offers an exclusive intimate setting with just 72 homesites in this 54-acre development. The natural beauty of Southwest Florida is evident throughout the project with views of preserves, water and of course beautiful Southwest Florida sunsets.

Lot sizes at Hidden Harbor are generous and will accommodate an estate home. Fifty-nine of the homes within Hidden Harbor will be waterfront with their own private docks.

Hidden Harbor is located off US-41 in South Fort Myers between Emerson Square and Harborage. This location is very convenient to the emerging Fort Myers-Estero corridor including Florida Gulf Coast University, Southwest Florida International Airport and regional malls like Coconut Point, Gulf Coast Town Center and the Miromar Outlets.

Cameratta Properties purchased the 510-acre parcel from Lenar that was formerly known as Cypress Shadows. This parcel is located in Estero just west of Bella Terra on Corkscrew Road.

Cameratta has re-named the project The Preserve at Corkscrew and has re-zoned to eliminate the golf course and lower the density from 770 to 520 homes. The Cameratta marketing plan for this exclusive gated community is to sell vacant lots in a bring your own builder approach. The Preserve at Estero lot prices range from $300,000 to $500,000.

Bella Vida was developed by D.R Horton. Other D.R. Horton communities in the area include Catalina Isles in Fort Myers and Valencia Golf and Country Club in Naples. Brookwood has a track record of buying other unfinished subdivsion vacant lots from D.R Horton. Brookwood’s portfolio in Southwest Florida includes holdings in Lehigh Acres, Port Charlotte and Punta Gorda.

Commerical property purchases, leases [News-Press]

This story has attracted a large number of comments with the majority suggesting that the lot owner should swap properties and accept the adjacent vacant lot. The Maryland-based lot owner comes across as a tad bit petty suggesting that he would not be satisfied with a simple swap of properties.

Ultimately, It seems to me that Sunshine Title of SW Florida, the title company that handled the last transaction involving the sale of the house, would be responsible for making the homeowner whole.

I had a similar experience a couple of years ago in Cape Coral due to a surveyor mistake about a property line and a slab was built half-way on my lot. Fortunately, I was in the process of selling the lot and the error was discovered with just the slab in place. Once the error was identified, the builder expeditiously removed the slab and started over in the correct location. Although the vacant lot sale was delayed about a week, everything worked out just fine on that transaction.

House dreams turn to nightmare in Cape Coral [News-Press]

Approximately 10 percent of the residential lots for sale today in Cape Coral are over-sized “triple” lots. Triple lots are a better investment as there are fewer available throughout the city.

Triple lots measure 120 ft wide by 125 ft deep and are approximately one third of an acre. The standard “double” lot measures 80 ft wide by 125 ft deep and is approximately one quarter acre. The genesis of this double and triple lingo dates back to the early days of Cape Coral when Gulf American Corporation was originally marketing the project. Often the triple lots were an upsell by Gulf American to willing customers.

The extra width provided by a triple lots allow for a bigger home or a larger three car garage. Homes with extra square footage and bigger garages are certainly sought after in Cape Coral. If you are considering acquiring a triple lot, well priced options include:

• 1900 Chiquita Blvd. N – off-water lot in Unit 53 for $64,900
• 1803 29th Ter. – gulf-access canal front in Unit 71 for $249,850

Many affordable waterfront lot options in Cape Coral

Thinking of someday retiring in beautiful sunny SW Florida?

With the recent market slowdown, waterfront vacant lots are now within reach of many more buyers. In Cape Coral, many excellent waterfront vacant land options are available in the $70,000 to $80,000 range. Buy it now to lock in a great price and build down the road when you are ready.

We can guide you to the best lot to meet your short-term budgeting and long-term retirement needs. Please don’t hesitate to drop us a note and we can help you locate the ideal lot.

ffordability and growing inventory key factors

New housing permits dropped radically in Cape Coral last month. The 323 permits issued during May were off 26 percent from the 439 issued in April and less than half of the 724 permits issued in May 2005.

The run-up in Cape Coral lot prices over the past three years has pushed affordability beyond the reach of many first home buyers. These buyers are increasingly turning to Lehigh, where land costs are about 50 percent less than Cape Coral.

Many investors that built spec homes particularly in northeast Cape Coral are facing a challenging scenario as their outlay for land and construction is exceeding the current market value of the completed property. This issue appears particularly acute for those who started homes in the late spring and early summer and acquired the lot at the market peak.

Cape home permits plunge [News-Press]

With prices jumping from $2,000-$3,000 an acre in 2004 to over $20,000 an acre today, DeSoto County has experienced significant speculator investment. Over the past 11 months 26,000 acres have been changed hands with a total value exceeding $363 million.

DeSoto County lies north of Charlotte County and east of Sarasota and Manatee Counties and is expected to be developed as bedroom communities for the Sarasota-Bradenton and Port Charlotte metro areas. Most of the bets in DeSoto County are long term as not much development has occurred to date. The big push will be for utilities, water is available today and sewer treatment facilities are planned for completion in 2008.

Land rush turns to DeSoto County [Herald Tribune]

A conceptual plan has been unveiled for a new parkway which runs through the middle of the state of Florida. This roadway would connect to SR 80 in eastern Lee County near the Hendry County line.

The north-south portion of the roadway would provide connectivity between eastern Lee County and I-4 about 20 miles south of Orlando. The east-west portion connects Bradenton to Port St. Lucie.

If built, this roadway will have a revolutionary impact on the value of interior vacant land throughout Florida. The relief that this roadway would bring to I-75 would be welcomed by the entire region.

Parkway may bring I-75 relief [News-Press]

Most of the available lots are located along canals in neighborhoods between McGregor Boulevard and the river. This south Fort Myers area is highly sought after and contains some of the finest communities in the area. Fort Myers gulf access lot prices start at over $300,000 and range upward to over $5M.

At the lower end of the price range, 14570 Laguna Drive in Peppertree Point is listed at $333,333. This lot is .175 acres and has boating access to the river via a boat lift which can accommodate boats to 23 feet.

15346 Myrtle Street in Tahitian Shores is listed at $595,000. This .451 acre parcel includes a new dock and direct boating access.

997 Bal Isle Drive in Town & River Estates is listed for $847,000. This .293 acre parcel offers deep water direct boating gulf access.

Please explore other Fort Myers gulf access lots.

The News-Press ran an article on the plans of Jack Solloway, owner of Secure Holdings in Fort Myers, to give back to the community. He plans to build 200 affordable homes, priced at under $200,000, for working-class professionals like teachers.

What the article failed to mention was the army of telemarketers equipped with the latest tax records that are calling existing lot owners around the country and making ridiculous below market offers. The fact of the matter is that Jack Solloway’s supposed good deed is being funded on the backs of property owners selling him their land significantly below market value.

Land dealer’s mission: Sell Lee homes for $199,000 [News-Press]

If you are considering building a home in Florida on the water, now is a great time to secure a great deal on a piece of property. The lot inventory has grown considerably and buyers have the leverage right now to negotiate a favorable purchase.

With several hundred miles of gulf access canals, Cape Coral is on of the most affordable waterfront communities in Southwest Florida. Most gulf access lots in Cape Coral are .25 acres and are located on canals that are a minimum of 80 feet wide. Lots that are larger or located at intersecting canals or basins generally sell for a premium.

One of the best deals on a gulf access lot in Cape Coral is 1504 NW 33rd Place, listed at $224,900. This parcel is located in Unit 60 in northwest Cape Coral and is .25 acres.

Another gulf access lot deal is 415 SE 29th Terrace, listed at $269,900. This lot is located in Unit 26 in Southeast Cape Coral and is .248 acres.

Here is a resource to view available Cape Coral gulf access lots.

This area still has the look and feel of “old Florida” with one of a kind establishments like the The World Famous Buckingham Blues Bar and its beer drinking mule Bucky.

The developer is seeking a zoning variance to increase the per acre density of the project and for this privilege would be kicking in nearly $3M into the housing trust fund to develop affordable housing.

The existing residents are worried about traffic woes on the existing roadways, which are already very congested and overdue for widening. The catch-22 in this scenario is that a less dense multi-family project could still be built on the site without any contribution to the affordable housing fund.

This outcome of this project has ramifications for the entire Buckingham area as development moves east from I-75. Many larger parcels in the area have been acquired by developers and could change the face of the area. One project, Horse Creek, is an upscale 113 single family gated project being developed by Daniel Wayne Homes.

Lee density deal might not fly [News-Press]

What would you build?

An interesting question arrived from a reader in our mail bag yesterday about what to build on a vacant commercial lot in Cape Coral.

First off, the commercial market in Southwest Florida and particularly Cape Coral remains very hot. Commercial vacancy rates are in the low single digits in Cape Coral. Commercial zoning represents less than 10% of the Cape’s developable land, creating significant shortages throughout the entire city. Nearly 60 percent of all Cape Coral workers have to leave each day to go to work, clogging the bridges during the commuting hours.

With regards to the mail bag question, “What would you build on a vacant 1.5 acre commercial lot on Cape Coral Parkway near Chiquita Boulevard?” One of my colleagues recently met with Cape Coral Economic Development Director, Mike Jackson and asked the same question about a similar lot. The feedback from Mr. Jackson was overwhelmingly in favor of either general or medical office space.

I am in complete agreement that Cape Coral needs more office space. I would welcome any feedback from any readers on this question. If you have an opinion on this please click on comments at the bottom of this post. It is painless!

They are the real estate equivalent of an orphaned child, unwanted and left to fend for themselves. We are talking about those strange shaped lots that are leftover when an area is developed.

In Southwest Florida, many odd-shaped lots in both waterfront locations and with commercial zoning are in demand for development. Often times a trade-off in reduced pricing for odd lots lots is offset by higher construction costs associated with building on them.

Developers cash in on strange-shaped sites [Post-Gazette]

Ok, you have hit a couple of home runs in the real estate market and the time is right to build the dream house. With this success, you are drawn to the epicenter of success in Lee County, South Fort Myers

No dream house belongs on a postage stamp sized lot so typical at many of our gated communities. A trophy house needs a BIG LOT. For the purpose of this discussion, we are defining big lots as an acre or larger.

A hidden gem just a short distance from the Sanibel Causeway is Shenandoah, a secluded private gated community of 21 homes. The lots are a spacious acre and two horses are allowed on each lot. 16311 Shenandoah Circle is listed at $350,000.

Another option in South Fort Myers is the gated community of Belle Meade. A dream house would fit in just fine in this upscale community. A 1.45 acre parcel at 8500 Belle Meade Drive is available for $425,000.

Rainbow Farms is another South Fort Myers community with upscale homes. A 1.66 acre parcel at 9034 Ligon Court is available for $545,000.

For the super successful player, this 1.1 acre riverfront parcel at 14040 Schultz Road is one of the best vacant lots in South Fort Myers. This outstanding parcel has 250 ft of frontage on the intra-coastal waterway and a 125 ft concrete dock in a private protected basin. This beauty is listed for $5.590M

Pop quiz: What do taxes, traffic, 200+ days of sunshine and duplex rental income have in common?

Answer: Sure things in SW Florida.

A duplex is a two unit home that can be used in a split manner with one of the units serving as the primary residence and other as a rental property or as an investment property with two rental units.

While the CAP rates may not be reach lofty levels that we experienced prior to the last couple of years of land pricing increases, duplex properties are still paying off for many investors. Resale activity is stronger in this sector than single family construction with a pending to active ratio just under 20 percent.

The typical configuration here in SW Florida is a single-story side-by-side layout with each unit containing two or three bedrooms, two baths and approximately 1200 sq. ft. of living space. These structures are constructed on over-sized lots usually 100 ft by 125 ft and zoned RM-2. Currently gross monthly rents for duplex buildings are ranging from $1600 to $2000.

There are many lot options available today for a perspective investor. Three Lehigh Acres duplex lot options options currently on the market are: 920/22 Homestead Rd S for $53,000; 4633/35 24th St SW for $57,000 and 4728/30 27th St SW for $57,000. Please contact me if you are interested in exploring duplex options in SW Florida.

In what was a surprise to those advocating a market downturn, 1065 abandoned lots in Northport were sold in the first phase of the Great American Land Auction. At an average of $27K per lot, prices were slightly below what is available in the MLS system.

The challenge will be when a large number of these lots hit the resale market in the next 60 days. Additionally, more Northport lots will be available via auction starting next week.

North Port lots sell high, go fast [Herald-Tribune]

Gulfshore Business has an indepth story about Syd Kitson, the former NFL lineman who is trying to build a new city at the Babcock Ranch. At 91,000 acres, Babcock Ranch represents one of the last remaining large contiguous parcels in SW Florida.

The Man who would Buy Babcock [Gulfshore Business]

A surprising announcement from Collier County officials suggesting that Golden Gate Estates will reach full build-out by 2016. Golden Gate Estates has approximately 100,000 lots and about 50 percent now have homes built on them.

Southwest Florida is home to several massive plated communities including Golden Gate Estates, Cape Coral, Lehigh Acres, Northport, and Rotunda. As far as I know, this 2016 build-out projection positions Golden Gate to be the first of these communities to reach capacity.

It would be an interesting exercise to estimate the total amount of capital gains to be realized on all the vacant lots in these five Southwest Florida plated communities prior to 100 percent build-out. It is probably something like 900,000 lots x ($100,000 average price -$3,000 average initial price) = $87.3 billion.

Estates expected to hit capacity in ’16, study says [Naples Daily News]

The western-most neighborhood in Lehigh, bounded by Lee Boulevard, Alvin Avenue and Buckingham Road is a hot sector of the SW Florida real estate market.

Location is everything and this neighborhood is less than four miles to I-75 exit 136 via Colonial Boulevard. Shopping is very convenient from West Lehigh, particularly with the new Crossroads Shopping Center Publix located at the intersection of Colonial Boulevard and Immokalee Road.

A high percentage of the homes in West Lehigh are newer with many more currently under construction. A real sense of community exists with many blocks built out to capacity. This is a feeling that is still missing in other parts of Lehigh that are less developed.

Homes for sale in West Lehigh are currently listed in the $250,000 – $300,000 range. Vacant lots in West Lehigh start are currently listed in the $58,000 – $70,000 range including 5212 Billings Ave at $59,000, 1026 Acroft Ave at $59,500 and 1002 Adeline Ave at $65,000.

Lehigh Acres is one of a kind, 90,000 vacant residential lots and nowhere to build new schools. With 50,000 current residents and capacity for around 300,000 residents when fully built out, Lehigh is expected to need around 25 new schools over the next 20 years.

The plan was for the County to acquire delinquent lots from owners that owed back taxes and then trade them with other lot owners to assemble parcels to build schools. With the rapid value increases in Lehigh lots, owners are more diligently paying back taxes and Lee County has not been able to acquire delinquent parcels.

If anyone at the Lee County Lands Office reads Gulf Returns, I have some awesome lots that are available, just give me a call.

Lehigh lots slip away [News-Press]

An auction of Quail West estate home lots in Naples this weekend will be a good litnus test for the strength of the local luxury home market. This is a unique approach by Orlando based Ginn Company to market a high-end community.

Lot prices range from the $600,000s to $1.3 million. They’re available in two sizes — one acre and a half-acre. They include a full golf membership to Quail West’s country club valued at $175,000. Club membership is required.

Orlando-based Ginn Co. will unveil its new vision for the upscale Quail West residential community at the Collier-Lee county line. And for the first time since acquiring the development and spending millions on improvements, the company will offer estate-size lots for sale.

About 1,000 registered to buy the lots, so Ginn stopped taking reservations from interested buyers three weeks ago. About 40 percent of the reservations have come from local residents. All of the potential buyers coming to the event have put down a $500 deposit. But there are only 266 home sites for sale at the master-planned, golf course community off Bonita Beach Road, a half-mile east of Interstate 75.

“Our goal is to sell every one of those 266 lots,” said Tom Brosnan, vice president of sales for Quail West. “We are confident in saying that we expect sales from this event to be well over $200 million.”

There are currently 17 re-sale lots listed in Quail West ranging in price from a low of $650,000 to a high of $1,490,000.

Hundreds coming for weekend bids on lots [Naples Daily News]

More than 2,000 home sites in North Port that nobody wanted for years are now prime real estate.

That was evident Tuesday night when close to 350 people, a third of whom were real estate agents, crammed into the North Port Performing Arts Center to learn about the sale of 2,130 tax-delinquent lots, which has been dubbed the “Great American Land Auction.”

Doubts raised about lot sale [Herald-Tribune]
Residents concerned lot auction unfair [Sun-Herald]