Agricultural Real Estate Prices Soar In Florida

In addition to hurting the state’s conservation efforts, Florida’s housing boom has taken a toll on the agricultural community. Prices for Florida agricultural land skyrocketed last year as developers and speculators hunted for precious real estate. Prices rose between 50 percent and 88 percent in Florida between May 2004 and May 2005, according to an annual survey conducted by the University of Florida’s Food and Resource Economics Department.

Survey participants said land values were increasing as a result of demand for rural home sites, speculation and investment by foreign buyers, according to the Lakeland Ledger.

“They indicated that farmland was not being purchased for agricultural purposes in most cases, and that the income from the agricultural use was not a primary consideration in the purchase,” wrote John Reynolds, the survey’s author and a professor with UF’s Institute of Food and Agricultural Sciences.

The survey compiled 185 different reports from appraisers, farm lenders, brokers and other officials from across the state, with data grouped by region and usage of the land. In Central Florida, which includes Polk County, the highest annual price increase was for unimproved pastureland, which jumped up 82.3 percent to $4,133 an acre. Orange groves saw the lowest increase, with prices rising a still-significant 53 percent to $9,805 per acre.

“Home prices have gone up tremendously. The same thing going on with houses is happening to agricultural land. Groves are going for $50,000 an acre around Chalet Suzanne (in Lake Wales), and $15,000 to $20,000 around Lake Buffum (in Alturas),” said John Hunt, owner of Hunt’s Appraisal Service in Bartow.

Statewide, the highest price increase was recorded in the soaring South Florida real estate market, where grapefruit groves shot up 88 percent to $9,897 per acre. In Northwest Florida, improved pastureland grew by 87.2 percent to $3,337 per acre, while irrigated cropland in Northeast Florida rose 85.4 percent to $6,356 per acre. For historical perspective, the 2004 survey showed the highest price increase in Central Florida was just 24.6 percent.

“The numbers floor you sometimes when you see them,” said Curt Wheeler, president of Wheeler Appraisals in Lakeland. “It’s a good time to be a land seller.”

Joe String, owner of String Appraisal Services in Winter Haven, believes some prices in the UF survey might be estimated too high. String recently conducted a study of undeveloped 5- and 10-acre agricultural properties in Polk, Highlands and Okeechobee counties that were sold in 2004, then resold in 2005.

“The trouble is, there’s too many buyers and too few pieces of land,” String said. “It doesn’t matter where they are. If they came up for sale they were being bought. It’s going to come to a halt. I don’t know if it’s going to go down, but it’s definitely going to stop. It can’t keep going up like this.”

• Appraisers say prices are still high overall because of demand from buyers seeking land for recreational use or investment purposes.
• The average price increases ranged from 3 percent to 7 percent per month, with the majority of properties falling between 4 percent and 5 percent per month
• Higher rates on all Florida home loans are expected to slow growth in the agricultural real estate facet of the market this year, along with quelling residential home sales.