Warren County Virginia - 7.5+ Years of Land Inventory ?!?!
Land, They Aren't Making Any More Of It!
Good thing in this area! The last thing we need is more inventory!
Although they may not be making any more of it, most land sellers and/or their agents in our market area must not be paying attention to current market conditions. There are 326 active land listings in the local MLS for land in Warren County. Since 09/04/09, only 42 land sales have occurred. That would mean we only have a 7.5+ year supply of inventory on the market, provided no other listings come on the market! That's A LOT of inventory!
There are many reasons for this glut of inventory in our market place. Bank owned and short sale properties currently account for well over 50% of the sales that have taken place in 2010, which is continuing to drive down prices. The average sales price in the area has fallen below the average we experienced back in 2002. The cost of building has fallen, but not enough to keep up with the falling values in our area, builders are having to make drastic price cuts to sell their inventory.
Many builders use a rule I am sure many are familiar with when building a spec home. Purchase a lot, and then the cost of improvements should not exceed 4-5 times the lot value. More than half of the current land inventory is priced $75,000+. Using that rule, that would mean a builder would be expecting to sell homes in the $375,000 price range. So far in 2010, homes that have sold for $300,000 or more account for just under 7% of sales.
Obviously there are other factors effecting why sales are down, but with this glut of inventory in the marketplace, the simple economics of supply and demand are definitely in effect and should be driving down prices. Many listings have been on the market for YEARS without a single price change. Sellers (and agents) really need to ask themselves if they want to sell in today's market or are they willing to wait it out for another 7.5 years with the hopes that no one else will put their property on the market?
INTERESTED IN LAND IN WARREN COUNTY?
Click Here to View Land Listings in Warren County
CALL CRAIG ALEXANDER/WEICHERT, REALTORS® 540-671-6082
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