How do I determine lot or land value in the Naples and Bonita Springs areas? Specifically, what should I expect to pay for buildable lots west of Route 41 or near water?
Traveling south from Bonita Beach, there are a finite number of buildable sites for new construction. There is no undeveloped land so we are all dependent upon the very rare vacant lot or a “tear down” house. Regarding waterfront property, they only made so much water (as the saying goes) so this presents a more challenging and more expensive situation. Every beachfront property along Bonita Beach was built upon at one time or another, there are a few vacant lots on the bay side of Hickory Boulevard, a handful of never-been-built-upon lots in the community of Barefoot Beach and a few in Connors of Vanderbilt Beach. In the Crayton Road corridor (the neighborhoods of Seagate, Park Shore, Moorings and Coquina Sands) every lot was built upon as these neighborhoods originated back in the 1960’s.
Logically, the first place to turn to would be closed sales for similar properties. However, this is not necessarily a reliable or complete source for good information. The data certainly is not as abundant as finding comparable sales for resale homes. For this reason, sites such as Zillow and Trulia are useless for attempting to valuate land – there just isn’t enough current data for those algorithms to be accurate. Also, tax record assessments do not equate to market value.
As you might guess, the asking price of a vacant piece of ground does not necessarily reflect value. Regardless of what the owner’s intentions might have been (build on it for themselves, build on it for speculation, hold it, flip it, etc.), a vacant parcel for sale is an investment property – nobody is moving into an existing house on the property. The asking price
for any vacant parcel reflects the level of seller motivation and subjective factors such as view, location and neighborhood. That seller might not need to sell as he is not living there – he may just want to sell if he gets what he wants.
One of the best ways to determine actual property value is closed sales for “tear downs”. Recent sales for demolished homes says quite clearly what a buyer was willing to pay to obtain a buildable lot. Currently, buyers have paid between $850,000 and $1.1M for a typical “tear down” in the Crayton Road corridor and over $2.2M for an old waterfront home to make way for new construction. As an additional note, the cost for demolition can range from $15,000 to $30,000 depending on how many dumpsters of debris are hauled away, if there is a swimming pool and the type of original construction materials.
We have the local knowledge on land, resale homes and new construction. Because there are several subjective factors in determining lot value, please rely on our expertise to help guide you in putting a value on a piece of property that you are considering to purchase or sell. Here are some things that fall into that subjective category which will affect the price of a lot:
- Is the property waterfront? What is the access to the Gulf of Mexico for boating? Are there bridges that restrict the height of a boat? How deep is the water? What about sailboats? How wide is the canal? What is on the other side of the canal? What is the color of the water? What about changing tides? How close is fuel for power boats?
- What is the elevation of the building site?
- If there is an existing house on the property, what is the condition? Would someone else be purchasing this house and living in it with modest renovations? In other words, how much of the value is in the structure?
- Does the footprint and method of construction of an existing building lend itself to renovation instead of demolition?
- The view…….this is the ultimate subjective factor. How do you assign a dollar amount to the view? This changes from one individual to another. Water view? Gulf of Mexico, bay waters or a lake? Panoramic or restricted? Western towards the sunsets? Landscaped? Private? Garden? Pool? Neighbors?
- What is the orientation for the back of the house? Southern exposure on the swimming pool?
- Location? Near the beaches? Near restaurants, shops and entertainment? Near Olde Naples? Near a marina?
- What is your motivation? What is your timeline?
- What is the highest and best use for the property?
- Which direction is the real estate market going?
- Supply and demand…….who needs who?
Contact us to help guide you through the process as a buyer or a seller. We can provide the most up to date information and market analysis. Also, we have established contacts with owners of properties that are not listed in the MLS system.
Ellie Penaranda at (239) 776-5077 or Tim Cranch at (2390 272-4848
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