Is Snohomish County seeing a recovery in lot sales? I won’t get ahead of myself and say “yes” but it does seems that there is some signs of the new construction segment recovering. Recovery could be stemming from a few areas: banks are loosening their grip on money and lending to builders/developers, builders are seeing consumer confidence rise and want to provide new inventory, and/or builders are seizing the opportunity to pick up vacant lots up for mid 1990 prices.
Cheap prices seem to be driving lot sales primarily just like in the resale market but the resale market has the tax credit to help it along the way. 44% of the lot sales in 2009’s 3rd quarter have been purchase from banks or REO companies in what John Wahl calls the “new business”. When this “new business” is gone will prices rise back to where they were before the economic downturn? I highly doubt it.
2010 is going to be an interesting year and we’ll be hear to watch it unfold.
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2 Comments
I will say that a lot of these lot sales are being purchased with cash as the lenders are still working through their “toxic” assets. The new business cycle has begun but we are still flushing through the old business; once that is done we can officially say that we have hit the bottom.
Hey John, hopefully the cheaper lots stick around even after the toxic assets are sold. That way new construction home prices remain relatively low when compared to the resale market.