Lake Front Lot

Why would having 5 lot sales shake the market a bit?
When a market goes south, the first to slow and then come to a complete halt is lot sales.  At this point, in our market, it makes zero financial sense to buy a lot and build on it; as, I can could give you a $200,000 lot for free for you to build on, and I could still find a comparable house that is about a year old that is substantially cheaper than the construction costs alone.  Thus, that is why lot sales go to zero.

In my farm area, there are bit over 100 lots that are on the market, some on the MLS and some not.  In the past 9 months, there have been zero sales.  In the past 4 weeks there have been 5 contracts with 4 closings.....with prices from $100k to $1.7mm.  Thus,  there are 5 people who could care less about the financial decision as they want to build what they want despite that fact that it does not make financial sense whatsoever.

This is usually a major sign that there is a new shift in the market; or, it could be merely a fluke.  The fact that there are 5 in such a short period of time is eye opening.  Though I still think we are in the middle of a bump in the market, this may be a sign that I am wrong and that a true recovery in our market may be forthcoming much quicker than anticipated.

We saw this exact same thing occur in 2004 after our recession in Austin from 2001 to 2004.  Let's see what happens in the next coming months.  Cautiously excited........

 

7 Comments on Why would the sale of lots be a sign of a shifting market?

MAY
16
2009
650,191 Points Localism Sponsor Outside Blog

Interesting -- will look for that trend in our area and see what it means.
7:23pm • #1
439,072 Points 2 Featured Posts Outside Blog Called Shot Master

Hi Tim~ You are right.  In this market and economy it makes no sense to build when you can buy for less!  Now, some just have too much money and they just don't know what to do with it.....  
7:26pm • #2
654,053 Points Outside Blog

Tim,

     That is very interesting.  Let's hope it means we have bottomed out and the market is turning around.

Connie Lou
7:52pm • #3
717,476 Points 2 Featured Posts Localism Sponsor Outside Blog

I know people (very successful) who bought lots looking forward about 3 years...1 for planning and 1.5 for construction, marketing and closing.

I think it's a SIGN....
8:39pm • #4
254,360 Points 58 Featured Posts Called Shot Master

Hey Tim,

I have seen two lots go under contract this week here in my market, I wonder if that is the same sign as your market. I know our lots have died since 2008, but if they start to pick up, you know it's a shift.

-Lisa
8:58pm • #5
1,323,819 Points 35 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Hi Tim

Sounds like your market has shifted, and is headed in the right direction.

Good luck and success

Lou Ludwig
9:02pm • #6
MAY
17
2009

It's tough at times to be patient when clients ask in this market about building, but you make a great point - sometimes it's not about the money, despite the fact that we agents analyze decisions in that way!
8:53am • #7


What does the graphic say?
Leave a response…

(optional)
Spam Prevention:
 
Tim_moncrief-white_cropped_small Rainmaker_large

TIM MONCRIEF #1 KW Group '07-'12;AUSTIN;nwmc

Austin, TX

More about me…

Keller Williams Realty/Bartlett Real Estate Group

Address: River Place, Steiner Ranch, Austin, TX, 78730

Office Phone: (512) 418-1435

Cell Phone: (512) 576-7344

Email Me

Add Me


Listings

Links

Archives

RSS 2.0 Feed for this blog

Find TX real estate agents and Austin real estate on ActiveRain.