Although land continues to lag the recovery experienced by all other segments of the Summit County real estate market, the news is not all bad. More land is selling in a shorter amount of time and prices have stopped dropping. But the land market is still depressed.
Through September, 108 vacant sites were sold as opposed to last year through September when 87 had sold.
Average prices are up by about $125,000 to $455,000, but influenced by seven sales between $1 million and $10 million which happened largely in the Breckenridge area.
Leaving the ten million dollar sale aside, the realistic average sale price drops to $314,750, about $10,000 lower than last year when only 3 lots had sold for over a million by October 1 and none higher than $1.9 million.
Days on market have dropped from an average of 500 last year to “only” 358 this year and the average sold price has increased to 90% of list.
So why are high dollar land sales accelerating this year? Because well-heeled cash buyers are taking advantage of a three-year supply of land at bargain prices while the condition lasts. The last, best parcels for individual homes or development of multiple trophy residences are being snapped up right now.
The next wave will bring buyers for the lower priced lots in prestigious neighborhoods like Highlands at Breckenridge and Three Peaks. In these neighborhoods large numbers of lots are available for about half the original prices of when they were first subdivided in the late ‘90’s and early 2000’s.
But that next wave won’t come until lenders begin to participate in the land and construction markets again. When spec building becomes possible for builders without the cash to carry the whole project, land sales and prices will skyrocket once again.
That’s because Summit County is essentially out of raw land for new subdivision. What little vacant land we’ve got now is all there will be unless Congress decides to sell off the National Forest.
If you’ve been thinking about building, now is the time before large supply, low demand and bargain prices are gone.