Lee County lots don’t cost much

Undeveloped property being sold at an up to 90 percent discount

That’s what the market looks like these days for undeveloped property in Southwest Florida – especially if it’s already zoned for development.

So far, it’s mainly investors on the buying end as a glut of unsold or foreclosed-on houses keeps down home prices, said Fort Myers-based real estate broker Randy Thibaut of Land Solutions. An actual builder typically can’t compete with existing inventory.

Still, he noted, the investors are able to buy at stunningly low prices – as little as 10 percent of what parcels went for three or four years ago before the housing boom collapsed in early 2006.

And at least one of the deals has already paid off in new-home sales – Marbella Lakes is being built in Naples by G.L. Homes on property it bought in bankruptcy from Tousa Homes.

Thibaut recently brokered two deals he points to that illustrate his point:

- A 256-acre parcel on Winkler Road Extension in Fort Myers sold for $5 million, one-ninth of the $45 million it commanded in November 2005.

- A 309-acre tract off Bayshore Road in North Fort Myers went for $2.5 million, less than 10 percent of the $26 million paid in May 2006.

Don’t expect to see prices go much lower than that, Thibaut said. “We’ve clearly hit the bottom. How long we hang there, I don’t know. I see a surge of interest and investors are coming out. I think they were waiting for the bottom to invest.”

Buyers, for the most part, are investors looking to hold for a few years and then sell for a profit, not actual builders, he said.

But Sunrise-based G.L. Homes has taken advantage of the trend with its Marbella Lakes project in Naples, said Patty Campbell, the company’s Southwest Florida division president.

She said it was “a fraction of the original cost.”

The exact amount G.L. paid could not be determined.

Engle Homes, a subsidiary of Miami-based Tousa homes, put $90 million into Marbella Lakes before Tousa filed for bankruptcy reorganization in January 2008, according to G.L.’s Web site.

G.L. picked up the property from General Motors Acceptance Corp., a Tousa creditor, at a steep discount, Campbell said.

Now, she said, with single-family homes starting at $309,000, “It’s very competitive with resales and even foreclosures or short sales. People would really rather have a new home.”

Opportunities like that still are few and far between in Southwest Florida, Campbell said. “We’ve looked at some other ones and passed; we didn’t think it was quite the opportunity Marbella was.”

So far, a recovery in new-home construction hasn’t started. In June, builders pulled 94 single-family permits in Lee County – less than a tenth of the level at the height of the boom.

When will that trickle turn into a steady flow?

Michael Timmerman, a Naples-based senior associate with Fishkind & Associates, an Orlando-based economic consulting firm, said “we probably won’t start to see new homes start to come out (in substantial numbers) until the beginning or middle of 2010.”

When that happens, he said, “My guess is it will probably be the little guys to begin with” building most of the houses rather than the large national home builders.

The national builders, he said, will be a bit slower because “they may have to ramp up their operations because they’ve laid everybody off. The little guys are a lot nimbler.”

Bob Knight, a co-owner of Paul Homes in Cape Coral, said he intends to be one of those who are there to take advantage when the tide turns.

The ranks of local builders and subcontractors have been decimated by the housing bust, he said, and those left will be “extremely busy.”

Courtesy of News Press

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