You don’t need reading glasses to find Texas on the map. It’s big all right. No land crisis here. Or is there? Talk to any builder these days and you might be surprised to hear all the talk about a shortage of land. Technically, we’re not running out of land; it’s the developed land that’s getting hard to find.
The issue: A home can’t be built until the raw land is developed. You need sewers, streets, and utilities. Cities need to approve plats and assign addresses. And all this development takes time—lots of it. That empty home site you pick from a plat map is the result of years of development work.
The problem today is that developers stopped developing when the mortgage crisis hit a few years ago. They didn’t want to incur the expense of preparing the land if they couldn’t sell it to a builder right away. Now that the economy is on the upswing and people want to buy new homes again, we need to get the land engine firing on all cylinders again.
The bad news: In addition to the lengthy lead time—it takes a couple years to prepare raw land for building new homes—we’re also going to experience sticker shock. According to Antares Homes president, Ron Formby, lot prices are 30 to 50 percent higher on land deals today versus what was paid just a few years ago. “Higher lot prices mean higher home prices,” explains Formby, a 40-year industry veteran. “But there’s good news. Some builders, like Antares, still have access to lower-priced lots because the contracts were negotiated at the right time. These lots are ready for new construction—today. Once these low-priced lots are gone, however, you’ll never again see home prices this low,” observes Formby. “Smart buyers are going to lock the favorable prices and historic low mortgage interest rates and build today.” For more information, visit www.AntaresHomes.com.