Land value are plummeting outside Miami-Dade County's Urban Development Boundary line in Florida's most populous county; another indicator that land speculators are throwing in the towel on platted subdivisions. Take a look at this 49 acre parcel for sale outside the UDB at $1.7 million or $34,694 an acre. The property is near other sites where land speculators invested outside the UDB in anticipation of paving farmland and platted subdivisions to the Everglades. Top lobbyists turned developers purchased Krome Gold Ranches (Rodney Barreto, Agustin Herran, Armando Guerra) at the top of the market in December 2005 for $44,608,600 for 466 acres, or, $95,726 an acre. That's more than 2.5 times the price of the land for sale next door.
Just east of this property are 125 acres owned by Neighborhood Planning Company (Armando Guerra, Agustin Herran, Ramon Rasco, Carlos Garcia and Sergio Pino), bought in July 2005 for $15,000,000, or, $120,000 an acre.
Krome Investments, LLC (Sergio Pino and Armando Guerra), in the same area, bought 59 acres in December 2005 for $6,621,440 or $112,227 an acre.
A Costa Rican speculator bought the 49 acre property in 1989 for $975,000 for almost $20,000 an acre. If the speculator sells it for his asking price today of $34.6K per acre, his average return on investment in 3.8 percent per year. It should be noted that the county has the acreage assessed for $3,008,145 which is a long way from the asking price of $1.7 million.
In “Build Them, and They Will Come” (May 21, 2005), an editorial published in The Miami Herald, Willy Bermello--former president of the Latin Builders Association-- confidently predicted:
“... real estate continues to still be a safe harbor for investors, whether it be equity or the purchase of a condo in South Florida, where doubling of your investment in less than two years is commonplace. If you have euros or British pounds, then you buy with a built-in 30 percent to 40 percent discount. Miami deserves its place next to Shanghai and Dubai. More important, it deserves our confidence. The bubble is not latex but stainless steel.”
In fact, Miami deserves its place next to Moscow, where stock market prices declined more than 70 percent in 2008. This leads to a couple of conclusions.
The suburban sprawl model is done and broken. All those bets on moving the Urban Development Boundary: what are they worth now at the Miami Dade County Commission where so much energy chased the housing asset bubble that commissioners forgot to lock the door at Miami Dade Transit and the Miami Dade Housing Agency, looted by B list lobbyists all clamoring to get aboard the property speculation train. You bet we are worried that federal dollars will somehow be used to bail out the speculators who control the county commission.
1 comment:
We can only hope that the silver lining of this economic mess is that there is more of an incentive for the agricultural 'transfer of development rights' program, and the Environmentally Endangered Lands program. It would be nice to avoid future UDB battles by just taking the land out of commission - and now may be the best time to make that happen.
Anyone want to pool funds and buy 49 acres of land??
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