U.S. Land Gets More Expensive

Front page of the first issue of The Wall Stre...

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.

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About Gary Snowdon, ASA

Commercial Real Estate Appraiser in New York State's Hudson Valley, Capital, Saratoga, and Adirondack Regions.
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