Developer Mercedes Homes had to discount 130 vacant lots in Florida’s Treasure Coast by 72 percent in order to find a buyer, according to the Palm Beach Post.
The buyer ended up paying $2.52 million. That is an average of $19,400 for lots that sold for up to $70,000 before the real estate downturn. That works out to 28 cents on the dollar.
While the pricing is attractive, the likelihood of the market where the lots are located – Port St. Lucie in St. Lucie County – coming back anytime soon is debatable given the small population and the vast amounts of land in the area.
St. Lucie County is an area where South Florida speculators flocked to given the low pricing and the large amount of new housing stock that was delivered in the last three years.
For a pricing comparison, consider that Morgan Stanley paid 50 cents on the dollar to buy 11,000 improved lots in highly sought-after areas from Miami-based Lennar Corp.
It is impossible to predict the bottom but the recent sales activity, especially land deals, is a sign that 2008 should be an active year for bulk transactions.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to sign up for Peter’s weekly Market Intelligence Report.
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