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October 31, 2005
Land Sales Could Slow
Owners of undeveloped land still have dollar signs in their eyes. But with the housing market cooling, builders aren't so willing to pay up for buildable lots. That means there could be a huge gap between the price owners are demanding (high) and the price builders are willing to pay (low). When that happens, sales slow dramatically.
The always-interesting John Burns of John Burns Real Estate Consulting in Irvine, Calif., spelled out this argument in a brief analysis today. Check it out.
Economy, Housing Prices, Investing in Real Estate
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I was considering buying a 3 acre lot just outside of town last year. The landowner wanted $45,000 ($15k/acre) and I noticed in the property tax roll that he paid $150k for the whole 20 acre tract the previous year.
I remember less than a decade ago when land was $5k an acre. Greed makes people do stupid things.
Posted by: Wes at October 31, 2005 04:14 PM
The blogger speaks of land (improved and unimproved I assume), as if it were a homogeneous commodity. Prices are going down...in which markets? In Florida, Arizona, and Texas? Or in California and Colorado? In urban, sub urban, ag, commerically zoned, or residentially zoned land? 10 miles, or twenty miles, from population centers? In urban infill areas? With or without utilities/services?
Generalities get us nowhere...specifics you can use to make prudent investment decisions with.
Posted by: Boe Clark at October 31, 2005 07:17 PM
Point well taken. Specifics are always better. In fact I'm going to point out your comment on the Real Estate Investment Ideas? thread.
Posted by: Peter Coy at November 1, 2005 10:30 AM