Building is Strong But Lots Are Scarce

Sold sign thumbLand is getting scarce. Don't believe me? Just ask your local builder. Lots in the hottest neighborhoods are selling like wildfire in major Texas cities including Houston, Austin and San Antonio. While home sales are starting to take off in cities across the nation, Texas is simply one of the brightest spots for homebuilding right now. Weighing heavy on lot demand is the fact that over the past 4 years no one has been developing any land, so there is not much out there to choose from.

 

 

 

 

 

 

Lake wood thumbAnd builders are feeling the price pressure too. In the Woodlands - one of Houston's largest and most successful developments - high-end lots are extremely scarce or non-existent. One new addition to the high-end market will be a very elite group of lots being developed on Lake Woodlands in Houston. The lots will reportedly start at $1,000,000 and sit on an island in the lake, which will be accessed by a private bridge currently under construction. The Woodlands is also rumored to be gathering up land in the surrounding areas for more development.

 

 

 

 

 

framer thumbTypical builder lots are in very short supply according to a local realtor with Remax in the Cinco Ranch area of Katy, Texas. "Homes are selling with multiple offers and builders simply cannot keep up with new home demand," he said. That has led to many large home builders buying more lots than they have since 2005-2006, when home building was at its peak. "I am paying $78,000 for a lot that was $56,000 just last year and I could have bought all of them I wanted at that price" said one small Houston area builder who builds around 200 new homes a year. "The biggest builders get the best lots in the best areas, and small builders just have to choose from what's left over" he added.

 

Small builders are feeling the pinch too as they deal with land going up by 30% over the last year. Add to that the pain of almost weekly price increases on building materials, including plywood, mouldings, and lumber - and home prices are headed higher. It's simply becoming a supply and demand situation with demand outstripping supply. One thing is for sure though, at least we are all back building again and for that we can all be happy.

 

 

 

 

 

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