Some of real estate’s hardest hit areas are seeing some very welcome land acquisition activity.
Home builders are seizing the opportunity to acquire finished lots and position themselves to ramp up construction as the housing market begins to recover. Finished lots are defined as developed home sites with streets, sidewalks and utilities installed. Many of the finished lots currently on the market are in communities started in 2006 or 2007, when the real estate market was going crazy, and then put on hold or abandoned when the market went into its nose dive.
The opportunity to acquire finished lots offers a homebuilder the advantage of today’s market pricing on the land with the development included for little or no cost.
The Wall Street Journal reported last week that Pulte recently fought off six other bidders in their vie for a prime piece of land in Gilbert, Arizona, a popular suburb of Phoenix. Analysts say that over the past few months, there has been more activity in some of the weakest housing markets across the country with prices showing the first increases, in some areas, since 2006.
Lot prices in Phoenix, Southern California, Sacramento, Orlando, and Los Angeles are reported up as much as 40 percent over the market prices of early 2009, according to Zelman & Associates housing research firm.
Joseph Carl Homes in Phoenix this year has acquired 300+ home sites in Newland Communities’ Estrella, a 12,000-acre master plan just west of Phoenix and quickly brought the acquisition to market. The project, named CantaMia, is a highly-amenitized 55+ community with lakes, outdoor sports areas and Village Center currently under construction. The sales complex grad opened in February with 15 models, showcasing four product lines. Since opening, the community has welcomed thousands of visitors and provided renewed excitement and interest in the master plan of Estrella.
Lynn Palmer of Arizona consulting firm, Renewal Zone said, “CantaMia sets a new standard in active adult communities. Joseph Carl Homes has put in place the location, amenities and team for successful results!”
According to the “The Wall Street Journal” Newland’s Chief Executive Bob McLeod indicated that Newland has signed four land contracts this year and has two more deals in the works. The contract price for the 140 lots on the two latest deals is up 33% from a year ago.
The National Association of Home Builders‘ housing economics reports for March showed approximately 115,000 single family building permits were issued in March 2010, a significant increase over the 83,000 permits for March of 2009. Illinois single family permits increased, as well, from 6,400 in March 2009 to 9,600 in March 2010.