From the Wall Street Journal:
Land values across the U.S. rose on average 13% in 2012, the first annual gain since 2005, according to estimates in a March report by Zelman & Associates, a housing consultancy. The increase was fueled primarily by growing demand among builders for finished lots, or ready-to-build home sites with roads, sewage lines, electrical-power hookups and other infrastructure in place.For consumers, costlier land means more-expensive houses. Land cost constitutes 21.7% of the final sale price of a new home, according to the National Association of Home Builders. As land prices rise, builders tend to pass 100% of those costs on to consumers.
This is a significant shift from the economic downturn, when builders halted development and liquidated land for pennies on the dollar. From 2006 through 2011, residential land lost a cumulative 58% of its value, Zelman says.
Read the rest of the story: U.S. Land Gets More Expensive – WSJ.com.
- Homebuilder Confidence Shaken by Fear of Too Much Demand (athomesense.com)
- Builders Frustrated by Lack of Lots (blogs.wsj.com)
- U.S. builder confidence falls on weak supply, labor (stltoday.com)