Our stagnant market has duly impacted the building industry. This week KB Home, a leading home builder that investors have viewed as well-positioned to ride out the downturn, posted a net loss of $ 772.7 million for the quarter ended Nov. 30.
Centex, Lennar, Beazer, DR Horton... they are all hurting and they are all relinquishing their hold on countless land opportunities. Those are the powerhouses of the building industry. The small town builders, with less sophisticated modus operandi have been impacted even more severely.
With spec homes lingering on the market for many months, in areas bulging with Real Estate inventory, and with the dramatic surge in short sales and foreclosures, builders have been cornered in a very tight spot. With specs to carry and bills to pay, many builders see no way out of their financial pinch, but to relinquish land they own to the highest bidders, for a life line infusion of cash much needed to save their businesses.
In the Myrtle Beach area, if we continue at the same pace we've had during the last quarter of 2007, it would take about 24 months to sell out of single family home inventory. Compare that figure to the seven and a half years it would take to deplete the land inventory. Those statistics are even more dismal in various other areas of the beach: in the Little River area, for example, it would take over 14 years to sell out of the current land inventory. Ouch!
Translation: if you are a lot owner and you need to liquidate pronto, it doesn't look too good for you, Mr. Seller! If you can hold long term: "Congratulations, you are a lot owner in one of the most successful Real Estate locations in the World!
For all those investors who are positioned long term, take note: BUY LAND IN THE MYRTLE BEACH AREA !!! Because of the plethora of available choices of lots, you will be paying pennies on the dollar for "dirt" that will be as good as gold in the next few years.
Your Myrtle Beach Real Estate Connection, Mirela Monte
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