Forget the Housing Recession…Land Boom in Progress

Months ago, I discussed how home builders were stabilizing and positioned for a major reversal in prospects and an improvement in their stock prices. That is happening now.

Breaking news: 47% of land brokers in the USA are reporting that the market for land is “red hot”. This number is higher for lots in prime locations and for finished building lots.

Prices for finished lots are up substantially, with major increases in Texas and on the East Coast.

In the D.C. area, NVR recently lost on a bid for major parcels in Montgomery county, Maryland. NVR’s stock, once acclaimed on Wall Street for not having large land inventory during troubled times, is now in the dog house because of their perceived shortgae of building lots. As business picks up, the glamor is back for those companies which have used the downturn to reduce their cost of operation and selectively buy prime lots at discounted prices.

At what point does it go the other way again? It always does eventually, but the immediate future points to higher prices in the D.C. Metro area.

Also today, for the first time since 2007, Zillow reports a year-over-year increase in home prices.

 

Ray Wedell, CFA

RE/MAX Gateway

703-855-7299

www.RayMaxInternational.com

 

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About RayWedellRealEstate

Real estate professional with Samson Properties. Chartered Financial Analyst, CFA
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