| || |
Selling Vacant Land
April 6, 2010 - Dylan Renz
While home sales have been difficult, vacant land sales have been nearly impossible. Here are the reasons it is so difficult to sell vacant land in today’s market.
Not Much Building
Since existing homes have become so affordable and there are so many to choose from, most buyers are opting to purchase a home rather than to build. In fact, some homes are actually being sold for less than it would cost to purchase a similar lot and build the same home from scratch. Therefore, you have few buyers looking for property to live on and you are left with investors who are simply looking for a steal.
Too Much Inventory
As of the time that I wrote this there are 239 vacant residential lots actively for sale on Pine Island. This means a lot of competition for sellers and just like the housing market there are short sales and foreclosures in the mix.
Not Many Sales
What I believe is possibly the biggest problem facing those looking to sell vacant property is that there is almost no data available for buyers (or sellers) to determine an accurate value. Since the beginning of 2010, there have only been 16 vacant residential lots sold on Pine Island. Only 16 out of 239! This creates a Catch 22 where buyers find purchasing vacant property too risky because of the lack of sales, therefore, ensuring that there is no more sales data for future buyers. This is the primary reason that investors are staying away from the vacant land market. If you do not have investors buying and you do not have buyers looking to live on the property, you do have many buyers.
So is there an up side to all of this? Since consumer confidence is the biggest problem than land sales should improve if the real estate market and economy continue to improve.
My advice? Think long-term. List your property at the price you need to make it worth selling and plan on waiting a while to get it. If you don't have time to wait, than price it as competitively as possible and accept that you are going to sell for less than you would like to see.
The flip side of all this of course is that it is a great time to purchase vacant land as long as you are looking for a long-term investment and not a quick flip.
No comments posted for this article.
Post a Comment