The following MacRo Report entry is written by Dave Wilkinson, Vice President of MacRo, Ltd. regarding the current climate of lots and land.
The past decade has been a roller coaster ride in the real estate industry and no segment has seen greater highs or lows than the market for lots and land. Buyers, sellers, agents, builders and surveyors have all felt the effects and can attest to what a wild ride it’s been.
In 1999 America was in the midst of the longest period of sustained economic growth in its history. The number of land sales in Frederick County steadily increased during the 1990s, but things started to change in 2000. Take a look at the number of sales of lots and land in Frederick County as reported by Metropolitan Regional Information Systems, Inc. (“MRIS”) from 2000 through 2010:
Of further interest is how prices have behaved during this period, as evidenced by MRIS data on lots between one and two acres in size:
2000—42 sales,median price: $73,000
2005—36 sales,median price: $215,000
2006—16 sales,median price: $267,000
2010—9 sales,median price: $150,000
Lot prices escalated rapidly in the early 2000s and sales decreased in response. By 2006 lot prices hit an“unsustainable high”and the bubble burst. In the past few years the number of sales has fallen substantially and prices are falling in response. At MacRo we believe that the market for land is near its trough and things will begin improving. While we don’t expect a rapid increase in the number of sales or in prices in the near term,we do feel strongly that the worst is behind us.
MacRo has decades of experience in the landmarkets of Frederick and Montgomery counties and surrounding areas. If we can assist you in selling, buying, preserving or valuing your land please contact us.