Don’t buy the land if it “pencils” ONLY….

This is an interesting  article from MetroStudy about the land development market nationwide.

Due to accelerating housing prices and continued demand for finished homes, land developers have been scrambling to find developable land.  I have noticed this in Denver where we see infill development on what would otherwise be thought of a inferior locations (on a busy street).

in an escalating market, lot and land buyers may be tempted to pencil in the escalating home price trends in their analysis in order to make an acquisition make sense.  The article recommends caution in takign this approach.

The article is a national article, which up until two weeks ago, I would have expected to apply to the Denver Metro market as well – HOWEVER – given the impact of the floods on the demand for replacement housing, and supply of labor materials and expertise – it will be very interesting to see how our market responds.

Describing the Housing Market: Time for a New Metaphor