Let’s Talk About Real Estate: What Can We Expect?
465 miles.
That’s how far it is from my house in Tampa to the Alabama state line at the Western edge of the Florida Panhandle. We have family in Alabama, Louisiana, and Texas, so we’ve made the trip past that milestone often. And every time we reach it, we breathe a sigh of relief.
When we travel back home, we take a breath and prepare for what comes next: 200 miles of sheer boredom to Tallahassee. Then another 150 miles of more boredom from there to Gainesville, broken only by one right turn.
It’s a land of endless trees and little development, particularly from Tallahassee to Gainesville. This stretch goes around the armpit of Florida, which meets the Gulf of Mexico in a swampy mess that’s far removed from the fabulous beaches to the west and south.
So imagine my surprise when I found out that this 560,000 acres of hardwood trees and wood pulp forest is worth almost $1 billion.
The current owners have had the property for 20 years. They run limited timber operations but mostly just wait for the land value to appreciate. With Florida back in growth mode and limited availability elsewhere in the state, it seems their time has come…
After the invention of air conditioning, land in Florida has always been attractive, especially to retiring baby boomers.
While the oldest of the generation have already called it quits, the largest part of the population cohort, born from 1957 to 1961, have yet to retire. When they do, they’ll find winters in Ohio inhospitable, and like those who’ve retired before them, they’ll flock to warmer climes.
While Texas and other energy-rich states have gained a lot of media attention for creating jobs and attracting workers, Florida is still in the business of attracting retirees and those that serve them.
From July 2013 to July 2014, six of the fastest growing metropolitan areas in the U.S. were in Florida. The state added almost 200,000 people during that time, and passed New York as the third most populous state, with just shy of 20 million people. The fastest growing metropolitan area in the country was The Villages, a retirement community in Sumter County, FL whose population jumped by 5.4% over the course of the year.
Naples, Fort Myers, and Sarasota were also among the other top-growth spots.
This ever-growing Florida population will eventually fuel a steady rise in real estate prices. We can already see this in the number of vacation homes sold. According to the National Association of Realtors (NAR), people bought 1.13 million vacation homes last year! That was 57.4% more than 2013, which had experienced a 30% increase from 2012.
The numbers might be inflated a bit — the association has an obvious interest in positive real estate data — but there’s no denying the trend. People are buying vacation homes… and that’s often a precursor to using the properties for retirement.
This trend is not new to us, though. It fits the consumer life cycle we’ve been explaining to readers and audiences
