Florida Land Boom: New UF Survey Shows Florida Farmland Values Increased by 50 Percent to 88 Percent During Past Year
Chuck Woods (352) 392-0400
John Reynolds email@example.com, (352) 378-8966, (352) 378-8966
GAINESVILLE, Fla. — Demand for land by developers, investors and speculators pushed the value of agricultural land to record levels in all regions of the state during the past year, according to a new University of Florida survey.
Prices of agricultural land increased by 50 percent to 88 percent across the state, and most of the farmland is not being purchased for agricultural purposes, said John Reynolds, a professor with UF’s Institute of Food and Agricultural Sciences, who conducts the annual Florida Agricultural Land Value Survey.
“We’ve seen a sharp run-up in farmland prices over the past few years, and now we’re beginning to see an increase in land speculation by out- of-town buyers, developers and foreign investors. And there’s also a strong demand for rural homesites,” he said. “When you consider the volatility of the stock market, coupled with rising interest rates, land is a very attractive investment – some people buy and flip property for quick gain.”
Reynolds’ 2005 survey, which measures changes over the past year, divides the state into five regions: south, southeast, central, northeast and northwest. Because of the impact urbanization has on agricultural land values, the data for the southeast region, including Miami-Dade, Broward and Palm Beach counties, are confined to transition land values.
He said the survey indicates that the average value of agricultural land ranges from about $2,700 per acre for unimproved pasture and farm woods in Northwest Florida to almost $10,000 per acre for orange groves in Central and South Florida.
The value of grapefruit groves increased 88 percent in the south region of the state and 81 percent in the central region, largely because of crop loss from hurricanes, he said. The value of orange groves increased 52 percent to 53 percent in the central and south regions.
The average value of orange groves was $9,956 per acre in the south region – about $150 per acre higher than in the central region. The estimated value of grapefruit groves was $9,897 per acre in the south region – about $1,705 per acre higher than in the central region. The value of land with 5- to 7-year-old citrus plantings was $8,944 per acre in the south region – $83 per acre higher than in the central region.
In all regions of the state, the value of other types of cropland also increased by as much as 85 percent, and the value of pastureland increased by as much as 87 percent.
In the south region, the value for cropland and pastureland increased from 66 percent to 81 percent, respectively, Reynolds said. The largest increases were in the Indian River area, Okeechobee County and the Gulf Coast counties. Cropland and pastureland in other regions also posted big increases: 78 percent to 82 percent in the central region; 69 percent to 85 percent in the northwest region, and 69 percent to 87 percent in the northeast region.”
The value of irrigated cropland increased by 67 percent in the south region, 85 percent in the northeast region of the state and 83 percent in the northwest region. The value of irrigated cropland was $6,509 per acre in the south region, $6,356 per acre in the northeast region and $4,012 per acre in the northwest region.
The value of non-irrigated cropland increased 69 percent in the northeast and northwest regions. The value of non-irrigated cropland was $4,490 per acre in the northeast region and $3,332 in the northwest region.
The value of pastureland increased about 81 percent in the south region and 78 percent to 82 percent in the central region. The value of improved pasture increased 85 percent to 87 percent in the northern regions. The value of unimproved pasture increased 76 percent in the northeast and 82 percent in the northwest.
The value of improved pasture ranged from $3,337 per acre in the northwest region to $6,426 per acre in the central region. The value unimproved pasture ranged from $2,645 per acre in the northwest region to $4,715 per acre in the south region.
The value of farm woods increased 81 percent in the northeast region and 84 percent in the northwest region. The lowest agricultural land values were in the northwest region, ranging from $2,645 per acre for unimproved pasture to $4,012 per acre for irrigated cropland.
The survey also measures the value of transition land – acreage being converted or likely to be converted to nonagricultural sites for homes, subdivisions and commercial uses. Counties were divided into metropolitan and non-metropolitan counties, and transition land values were estimated for each region.
The value of transition land within five miles of a major town in metropolitan counties increased from 31 percent to 120 percent from 2004 to 2005, Reynolds said.
Within five miles of a major town in metro counties, the value of transition land ranged from $18,423 per acre to $46,481 per acre. The value of transition land more than five miles from a major town in metro counties ranged from $10,758 per acre to $23,575 per acre, except in the southeast region where transition land values were $66,667 per acre.
In non- metropolitan counties, the value of transition land within five miles of a major town ranged from $6,167 per acre to $17,143 per acre. Transition land values more than five miles from a major town in non-metro counties ranged from $5,333 to $10,600 per acre.
Survey respondents were also asked if they expect agricultural land values to be higher, lower or remain unchanged during the next 12 months. Eighty-two percent in northern areas and 88 percent in southern areas expect agricultural land values to increase during the next year. The expected increases varied by region and ranged from 14 percent to 25 percent.
However, Reynolds also said that participants should not expect large percentage increases in land values of the past year to continue. “The market can not sustain large double- digit increases for any extended period of time,” he said.
The UF Food and Resource Economics Department survey, which Reynolds started in 1985, was compiled from information provided by 185 respondents from around the state. They included property appraisers, farm lenders, real estate brokers, farm managers, land investors, federal farm- assistance and conservation staff, UF county extension agents, and others who develop and maintain information about rural land values.
More details on the survey, “Strong Nonagricultural Demand Keeps Agricultural Land Values Increasing,” are available on the UF/IFAS Electronic Data Information Source (EDIS) Web site at: http://edis.ifas.ufl.edu/FE625