Overall the Plantation real estate market had a strong year in 2017. The number of sales increased over the previous year despite having less inventory. The number of days on the market decreased while the sale to list price ratio increased. Despite a drop in average and median prices, home values appear to be on the rise.
The decrease in average and median sale prices was a result of a change in the mix of homes sold rather than a decrease in home values. In 2017, marshfront homes made up 16% of total home sales as compared to 29% in 2016. Wooded view homes made up 55% of total sales in 2017, as compared to 33% in 2016. Marshfront land values are typically much higher than wooded-view land values. Therefore this shift in the mix of homes sold resulted in a decrease in the average sale price.
Interestingly, although the mix of homes sold shifted toward a lower price point, average and median prices per square foot increased in 2017 as compared to 2016. This is somewhat unusual and can be partially explained by the fact that the average size of homes sold decreased to 3177 square feet in 2017 from 3,446 square feet in 2016.
In order to gain a better understanding of Plantation home value trends, we looked at the sale price per square foot with land value excluded. To do this we subtracted the lot price from the sale price and then divided this number by the square footage. For example, let's say a golf course home sold for $750k. It was 3,000 square feet and had a lot value of $300k. The price per square foot with the land value excluded would be $150 or $750k minus $300k, divided by 3000. To determine lot values, we referenced the county's assessed value for the land of each property. We assumed the assessed value to be 80% of the actual market value. Using assessed values is not a perfect formula and it does not always reflect true market value, however it does provide a general reference point which allows us to compare home sales across different categories. After reviewing 2017 sales, we found the average price per square foot (with land value excluded) increased to $144 from $124 in 2016. The increase in price per square foot with land value excluded in 2017 is a change from the recent yearly trend, which decreased each year from 2014 to 2016. This is a positive sign for Plantation sellers.
Golf Course Homes had a decrease in average and median sale prices. However, they had an increase in average and median prices per square foot. This was a result of some smaller homes selling in 2017 as compared to 2016. Overall, golf course homes are taking part in the overall Plantation trend of increasing prices.
Long Point Homes had a decrease in average and median price, yet had an increase in price per square foot. The leading cause of this was the difference in average square footage of the homes sold. In 2016, the average size was 4,085 square feet compared to 3,274 in 2017. When we subcategorized Long Point homes into marshfront and golf course homes, price per square foot increased for both categories. Average price per square foot of Marshfront Long Point homes went from $276 in 2016 to $286 in 2017. Average price per square foot of golf course Long Point homes went from $221 in 2016 to $267 in 2017.
Marshfront Homes did not have an increase in their average price. We think there are two factors influencing the marshfront home market. First, marshfront property was some of the first residential land to be developed on the Plantation and therefore tends to have older homes. Many of these older homes require some amount of updating which if not completed before selling, places pressure on sale prices. The second factor is high demand for marshfront property. Although outdated homes are keeping overall marshfront prices down, we think the value of marshfront land is going up. For example, one marshfront home sold for $1 million. The new owner demolished the home and built a new home from scratch. Essentially, the owner paid $1 million for the lot. We have seen other scenarios where buyers have paid $800k to $1.2m for marshfront homes which need $200k to $400k worth of renovations. Therefore the potential value of these properties is not captured by current sale prices. Considering these trends, we believe marshfront homes are actually increasing in value - a fact which will not necessarily be captured in sale prices of homes which need renovations.
Looking Ahead (Homes)
With wooded-view homes leading the way, the price increases of 2017 were driven by low inventory coupled with strong demand. Heading into 2018, inventory is even lower than it was in the beginning of 2017. There are currently 26 homes on the market as compared to 31 this time last year. (This number does not include under construction spec homes.) Demand seems to be relatively strong considering the number of sales more than doubled in the 4th quarter of 2017 as compared to 2016, despite lower inventory. The combination of low supply and strong demand should be a recipe for price increases in 2018.
All Plantation Villas
All Villas By Type
The Amelia Island Plantation Villa market had a strong year in 2017. Prices went up across all categories and inventory went down. At the end of 2016, there were 79 villas listed for sale. At the end of 2017, there were 54 villas listed for sale.
The villas built after 1991 (Beachside, Dunes Club, Ocean Club, Piper Dunes, & Spyglass II) led the way with a total of $665k worth of average price increases. While not every condominium experienced price increases, a majority did experience an increase over 2016. Of the condominium categories listed above which had comparable sales in both 2016 and 2017, 17 experienced price increases, while only 5 experienced price decreases. The statistics above do not account for variances in floor level, view quality, or update levels, however the fact that 77% of condominiums saw an increase in their sale pricing is a good sign for villa owners.
Beachside Villas had a strong year. The average sale price was $1.19m in 2017 as compared to $985k in 2016, and $883k in 2015.
Dunes Club Villas saw an average price increase from $1.42m to $1.62m. This increase was partly due to the mix of units sold with some higher floor villas selling in 2017. However, there were also sales with comparable floor levels between the two years, where 2017 saw price increases. For example, a 4th floor villa sold for $90k more in 2017 than another 4th floor villa in 2016.
Ocean Club Villas started the increasing prices trend this year with the sale of a $2.15m villa. For the year, they experienced an average price increase of $140k. This increase came despite the mix of units sold in 2017 containing lower floor levels than 2016.
Beach Wood Villas had a nice year with price increases in both the 2 bedroom midrise villas as well as the 3 bedroom townhomes. Beach Wood inventory remains low with one 1 townhome villa and 2 midrise villas on the market which should indicate further price increases in 2018.
Looking Ahead (Villas)
We anticipate prices to continue increasing in 2018. Inventory is still low compared to the past few years and demand appears to be strong considering the number of sales in 2017 was 25% higher than 2016, despite lower inventory. We expect the oceanfront villas built after 1991 (Beachside, Dunes Club, Ocean Club, Piper Dunes, Spyglass II) to continue leading the charge in 2018 as their inventory remains low. If cold winter weather continues across the country, we expect a busy spring and summer selling season - which is a good sign for villa sellers!