The Volume of Lot Sales in Frederick County on the Rise, But Still Only a Fraction of Year 2000!
Yes, that’s right there were 287 Rural Residential building lots sold in 2000 and since that time, with the exception of the boom years of 2004 through 2006, the number of units sold per year steadily fell to a low of only 50 closings in 2008.1
The last two years – 2009 and 2010 – showed a jump of 28% to 64 units and 56% to 78 units respectively. With that said last year’s volume only equaled 27% of that of 2000.
How Do We Define a Rural Residential Building Lot?
These properties are typically lots that have been subdivided off of agricultural land, or other rural zoning categories. Nearly all are approved with private septic systems and well water versus public water and sewer. These lots range in size from a minimum of one acre to over 50 acres. In most cases this type of vacant real estate is sold directly to individuals who plan to eventually build their home on the lot. Not included in these statistics are the lots purchased by regional and national homebuilding companies on large residential new home development projects.
Breaking Down 2010
At of the end of 2010 there was an inventory of over 450 rural residential building lots on the market in Frederick County. Therefore, with only 78 units sold last year that theoretically equates to a 5.8 year supply of lots remaining in the market place. But of course the market is always fluid with changing economic conditions and inventory fluctuations.
When that total inventory is broken down by lot sizes, a slightly different story emerges.
For building lots between 1 and 3 acres, 35 were sold out of an inventory of 235, equating to a 6.7 year over supply.
Parcels over 3 acres and up to 50 acres or “farmettes,” as they are often called, yielded 39 closings out of 204 building lots available – a 5.2 year supply.
Farm parcels of over 50 acres only offered an inventory of 12 parcels last year with a total of four being sold.
First Quarter of 2011: Improvement?
With three months now under our belt this year there have only been 11 registered closings through the Realtors’ Metropolitan Regional Information Systems (MRIS). But lot sales typically don’t show strength until the summer months, so this information is premature to use as a trend indicator for 2011.
Next week look for a perspective on what caused sales volumes to fall so low in the building lot market.
We tackle the big question of What is the Future for Building Lots in Frederick County?
All data was pulled from the Metropolitan Regional Information Systems (MRIS) an online listing service available to member of the Frederick County Association of Realtors.
Dave Wilkinson has been a licensed Realtor and Vice President of MacRo, Ltd. since 1992. He specializes in commercial property and rural land sales. He also provides real estate consulting services for land conservation.