While the real estate market experienced an “enhanced” cycle over the past ten years, the lot and land sub-sector has been subject to even greater volatility – like a business cycle on steroids.
The residential bubble of the mid 2000’s morphed into The Great Recession by the end of the decade. A question I’m often asked is: where in the cycle are we currently and what is the market value of my land?| Year | # Sales | Median Price | ||
| 2004 | 18 | $122,000 | ||
| 2005 | 34 | $200,000 | ||
| 2006 | 16 | $253,000 | ||
| 2007 | 20 | $209,000 | ||
| 2008 | 7 | $175,000 | ||
| 2009 | 8 | $154,000 | ||
| 2010 | 9 | $128,000 | ||
| 2011 | 9 | $103,000 | ||
| 2012 | 14 | $112,000 | ||
| 2013 | 19 | $105,000 |
At the turn of the millennium, the median price of a custom home lot was around $70,000 and sales volume was about 40 lots per year. Over the next six years a shortage of custom home lots developed and prices shot up: the median price peaked at over $250,000 in 2006. Prices reached an unsustainable level, and sales dropped. Then in 2008 the economy crashed and custom lot sales plummeted – falling below 10 lots per year.
The good news is that since the trough of 2008, sales have increased every year, albeit at a modest rate. While MacRo, Ltd. is not expecting a rapid run up in prices anytime soon, it is encouraging to see prices stabilizing and the number of transactions increasing as is typical in a period of recovery.
If you’re in the market to sell or purchase lots, land or farms, please give me a call. I’d be honored to assist you in your evaluation and help you achieve your goals.
Contact Dave Wilkinson at
301-698-9696 ext. 203 or
dave@macroltd.com