Land Sales: Going, Going and Going Up

NAPLES, Fla. – In parts of Southwest Florida, vacant residential lots are commanding record-high prices. With a shortage of homes on the market, more buyers are choosing to purchase land so they can build what they want. The trend has resulted in some eye-popping listing and sales prices for buildable dirt in the region, especially in Collier County.

One recent example? On Aug. 9, an undisclosed buyer purchased a more than one-acre property with 158’ of beach frontage for $18.05 million in Bay Colony. The lot sits in the single-family enclave known as The Strand, directly on the Gulf of Mexico at the north end of Pelican Bay, south of The Ritz-Carlton, Naples. One of only 12 beachfront home sites in the exclusive double-gated subdivision, it fetched more than any other lot in the waterfront community’s history.

According to the real estate agents involved in the sale, the buyer plans to build a four-story, 20,000-square-foot home on the lot – located at 7607 Bay Colony Drive. Public records show the buyer as a limited liability company, going under the name Dolphin Blue and managed by Thorp Investment Management Corp. in Naples.

Another example of the escalating land prices? Earlier this month, a double lot in Old Naples – at 59 Ninth Ave. S. – hit the market for $18.9 million. Based on its size, the lot has room for a 16,000-plus-square-foot home. Although it’s a house away from the beach, the listing boasts panoramic views of the Gulf of Mexico.

“It’s not even on the water. That’s pretty crazy,” said local real estate market expert Denny Grimes, of the asking price.

Another telling transaction? A 0.71-acre plot of waterfront land at 4100 Gordon Drive in Naples that went for $13.9 million in January after years of sitting on the market, resold for $18.9 million – or $5 million more – a few months later, Grimes pointed out.

“That’s an interesting thing,” he said. “Right?”

This year, a total of four residential lots have sold for more than $10 million in Collier County, through Southwest Florida’s multiple listing service, or MLS, Grimes said.

More records to set

There are five more lots on the market in that rare price segment in Collier, including one at 999 Admiralty Parade in Port Royal, with 122 feet of water frontage, listed at $25.9 million.

“Those super-duper land prices are a function of rising home prices and low inventory to choose from. So the alternative is to look for land, or people are buying older houses and tearing them down,” said Grimes, a longtime Realtor and president of his own sales team at Keller Williams Realty in Fort Myers.

South of Naples, Marco Island is seeing some crazy land prices of its own.

In the prestigious estate area, a waterfront property at the tip of Heights Court went under contract on Aug. 16 and when it closes it will likely top the all-time-high price paid for a residential lot on the island, said Jim Prange, a Realtor with Premier Sotheby’s International Realty. Listed at $6.3 million, the land should sell at – or near – the asking price, he said, based on the strong demand for housing on Marco.

“It could be a record price. We won’t know until it closes,” said Prange, as an observer.

Last June, a beachfront lot in Hideaway Beach, a gated community at the northwest corner of Marco, set the current record of $5.5 million on the island. A few years ago, a buyer could have purchased a waterfront lot in the estate area on Marco for $1 million, or even less, Prange said, but not anymore.

In the swanky area, there is just one waterfront lot on the market for less than $3.95 million. It’s priced at $1.8 million, due to site-specific challenges, Prange explained.

“There are actually bones on the property,” he said. “It’s an old Indian site. There is a little cemetery on the site, so you’ve got to build around it.”

A few buyers have purchased lots on Marco, then resold – or flipped – them for more money, to take advantage of the rising prices, Prange said.

One buyer got a waterfront canal lot for $340,000 about six months ago, for example, and expects to sell it for double the price. The lot is under contract for $700,000, with a closing imminent, said Prange, who’s involved in the transaction.

In 2010, Prange sold two larger waterfront lots on the tip of Scott Drive for $1.9 million each – and they recently resold for $5 million and $4.8 million, he said.

A new home

Most homebuyers on Marco Island are not in it for the money, Prange said.

Rather, many of them are making Marco their permanent home, fleeing from states with higher taxes and larger populations, where COVID can spread more easily through crowded places and there are more pandemic-related restrictions on residents and businesses.

“It’s amazing the younger people that are coming here,” Prange said.

That’s because, through the COVID crisis, more people have learned they can work remotely, giving them more freedom to live where they want.

“It made them realize too that life is a little short – and think about what is really important,” Prange said.

The Marco Island Area Multiple Listing Service shows 272 residential lots sold last year on the island. Now, there are fewer than 70 on the market, with another 25 pending, or under contract.

“Marco Island has quickly become the primary residence for many families,” Prange said. “Since I have been here, I have never seen a movement like we are seeing now.”

While lot prices have been on the rise in Southwest Florida since last year, they’ve really escalated in the past four months, particularly in Collier, Grimes said.

“Collier has very few homesites available, compared to Lee,” he said.

Scattered lots in Golden Gate and Golden Gate Estates have also seen price increases, but are still some of the most affordable in Collier. In Lee, lots can be found much cheaper, but they’ve ballooned in price as well.

Collier has just under 500 residential lots for sale, ranging from $20,000 to more than $25 million, Grimes said. Lee County has just under 5,000 residential lots for sale, ranging from $6,500 to $15 million, he said.

From January to June, Lehigh has averaged 550 lot sales a month, an increase of 170% from the same time last year.

Waterfront lot values are up 70% in Cape Coral, compared to last year.

In Cape Coral, builders are part of the rush to purchase land, as they snatch up sites to meet the strong demand for new homes in the city.

Over the year, lot prices for single-family homes are up 107% in Lehigh and 120% in Cape Coral – for dry ones, Grimes said.

“Those lot owners are happy,” he said.

However, Grimes pointed out that prices aren’t back to the artificial ones driven in part by speculators at the peak of the housing bubble in June 2005 – ahead of the Great Recession, which he’s happy about.

“It’s a bad sign if we see those numbers again,” he said.

Records broken

Mike Dodge, an assistant manager and director of market research at John R. Wood Properties in Naples, found record lot sales in a smattering of neighborhoods, communities and cities in Lee and Collier counties this year through the Southwest Florida MLS. That includes:

In Collier County:

• A sale on Golden Oakes Lane for $561,000 in Oakes Estates
• A sale on Brynwood Drive for $1.69 million in Quail West
• A sale on Caribbean Court for $3 million in Pine Ridge
• A sale on Kingfish Road for nearly $5 million in Royal Harbor
• A sale on Banyan Circle for $2.95 million in Coquina Sands

In Lee County:

• A sale on West Gulf Drive for nearly $3.9 million on Sanibel
• A sale on South Seas Plantation Road for $5.6 million on Captiva Island

“I’m sure there are many more records in other communities. These are just from where I happened to search,” Dodge said.

His research also identified record home sales in a handful of areas, including Port Royal, where a mansion on Gordon Drive fetched $52 million in January – an all-time high price in Collier that generated headlines.

Another record sale stands out. A waterfront estate at 233 Mermaids Bight recently went for $13.7 million – making it the most expensive single-family home sale in the history of Park Shore. Custom designed and built by its owner, it has been described as one-of-a-kind, with coastal elegance inside and out.

Kim Price, a broker associate with Premier Sotheby’s International Realty, the exclusive listing agent, who marketed the property for sale, said the record-breaking price “demonstrates the high demand for Park Shore real estate.”

“This neighborhood is now being shopped alongside the sought-after areas of Port Royal and Aqualane Shores,” she said. “It offers a beautiful beach and easy Gulf access for boaters – all while being located in the heart of Naples.”

Even with record sales occurring for homes and lots, Southwest Florida is still “considered something of a bargain when compared to some other markets,” Dodge said. “It’s no secret to those of us who live here how special this place is and, based on the fact that we’ve now got buyers coming in from so many new feeder markets, it seems like that secret may have gotten out.”

Copyright © 2021 Journal Media Group, Naples Daily News, Laura Layden