SUBDIVISION INVESTMENT
One facet of current real estate trends that I haven't seen much comment on, regards land. More specifically, investors in new developments. This is not apparent in the Shell Knob area, but our neighbors to the south (northwest Arkansas) are experiencing a problem in the Bentonville, Springdale area.
Many of the individuals attracted to make quick profits on lots in newly developed subdivisions, are coming face to face with the knowledge that what they paid for their land has now dropped substantially in value. There will be no quick flip.
They paid a higher price for land, than what the current market will bear. One result is they are making payments that many cannot handle for long. Land foreclosures will be increasing.
According to Housing Predictor, an on-line real estate forecaster, the land problem is expected to grow in 2007 and linger into 2008. Many first time investors bought newly developed subdivision lots with marginal down payments, hoping to make a quick buck by getting in on pre-sales on the development , then flipping land, and are still trying to sell their property.
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