Florida Retirement Buzz

For the second time in two weeks, a developer is planning to auction off his lots (with no minimum bid required) on Florida’s Treasure Coast. Glo Investments will auction 65 acres, broken down into five-acre lots at the Equus subdivision in Vero Beach. Each lot had a previous listing of about $589,000, but the slowdown in housing sales over the last six months has affected Equus. It was originally planned to be a gated, equestrian community. Some insight into hoped for economics of this development starts with the fact that the developer paid $1,700,000 for the 65 acres in 2004. If the 13 lots that comprised the 65 acres did sell for $589,000 each, the total income would have been $7,657,000. Subtract from this the cost of roads, drainage, landscaping, and electricity (which the developer has invested in), the owner would still have been left with a very handsome profit.

It is interesting that the newspapers are now reporting regularly on the downturn in the housing markets. They are usually hesitant to do this because advertisements from the real estate industry represent one of their biggest profit streams. The facts can no longer be glossed over. Another interesting perspective was provided by a recent conversation the author had with a realtor. He mentioned that the downturn was temporary because Sellers were now being more realistic in setting their asking prices. In other words, the downturn was caused by Sellers asking unrealistic, sky high prices. In my experience, most Sellers set their asking prices based on the input of realtors! But this guy was quite confident in placing the blame on Sellers rather than looking in the mirror and maybe, just maybe, seeing a co-conspirator.