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Lots of Opportunity. With the Investors Gone, the timing for buying land lots has never been better.
Jacksonville Ranch Club—03/31/2008—Special to the Florida Times Union
While it isn't as much as a buyers market compared to new and resale housing, for homeowners considering buying up a piece of property and building their own home this is the best time to be in the market for land.
According to realtors, builders and real estate appraisers in the First Coast, prices for residential lots or large tracts of land will find prices have cooled considerably since the housing market peaked in mid?2005.
"There really hasn?t been a better time to buy lots in the last five years," said Jeff Henderson SRA, president of Henderson Appraisal Group in Jacksonville. "Prices for lots have stabilized for the most part. I would say about 75 percent are showing little appreciation, less than .5 percent, and on the construction side, many builders are hungry. That?s where building a home on a lot can save someone money now."
Henderson says that, just as with single?family homes, new investors flooded the market from 2002 to 2005 ? driving up prices for land and properties.
"There were more buyers than there were properties," Henderson said. "Now, we?re all adjusting to the normal activity ? people buying properties and homes for living, not to hold and sell as investments."
Along with Henderson, who has done appraisal work for nearly 20 years in the First Coast, we spoke with Prudential Network Realty Agent/Broker Michelle Cummings, who specializes in single?family homes and lots, Randy Long of J.A. Long, Inc, a custom builder that purchases lots for home construction, and Prudential?s Michelle Mousin, who specializes in larger tracts of property.
Q: Are there differences in marketing a lot compared to a home? Cummings: With a home, a buyer can see, feel and touch it and can better visualize what it would be like to live there. It?s similar to selling pre?construction, but there you have a rendering of what the condo or new home will look like. With a lot, a buyer has to use their imagination to really see what their home would look like situated on the lot. In terms of advertising, it?s about the same. You might go to higher?end publications because of the price points on the land, but you would do that with a higher priced home as well. For example, I have lots in Ashton Oaks in Mandarin now, and I have to consider the size of the other homes already in the neighborhood, in addition to the property, in targeting to the right market.
Q: Are there any differences in the demographics of those who purchase a lot? Cummings: Not really. I?ve had buyers who are young professionals, more established buyers who have had homes built on lots before, and older retirees who are downsizing. The only thing they typically have in common is that they know what they like in a home and want it personalized to fit their needs, whether it?s a certain architectural style, the size, the views from inside, and other specific wants like those.
Q: When buying a lot, what should the buyer keep in mind? Cummings: Certainly, their personal preferences on lot size and location, access to utilities, surrounding zoning and, in some places, the composition of the soil is important.
Q: For residential lots, how is the pricing right now? Cummings: Lots are priced pretty well right now. If a buyer is looking at lot for building their own home, they will find sellers who are willing to negotiate.
Q: From a builder perspective, J.A. Long purchases lots for constructing custom homes. What do you look for in a lot? Long: We really look for properties that have a "wow factor" to them ? something that creates emotion for the eventual buyer. We also look for amenity centers, golf & country clubs, nice trees and, of course, waterfront opportunities ? whether its water view or access.
Q: What about the land itself? Long: When buying a lot, we look for a combination of things. First, the look and visual landscape of the site are important. We also look for lots with a nice tree canopy. You also want to check out the soil conditions. You don?t want too much clay in the soil, which makes the house more prone to settling later. You want nice, compact buildable soil conditions. Also, the height of the site is important. While you can add fill to level out a lot, if you have to add to much soil it will eventually kill the trees, so it?s important to check the county?s requirement for the finished floor elevation when you choose a lot.
Q: Where are you buying lots now? Long: We?re always looking for good lots where we can build. Since we?re based in Orange Park, we have several lots in the Fleming Island and Oakleaf areas, but we?ve begun focusing on lots and possible deals in other parts of town like Mandarin, St. Johns County and areas around Butler Boulevard. We especially look for good waterfront property. We typically own between 15 to 25 lots at any given time.
Q: Are there any bargains out there? Long: We haven?t been in any serious negotiations lately, but generally I think lot owners are more willing to listen to an offer now. They?re more realistic about the market conditions and not so focused on getting rich with a piece of property, so someone buying a lot today will be in a better negotiating position than they were a couple of years ago.
Q: How about large tracts of land? Mousin: Large tracts of land, and I?m talking about anywhere from 50 to 100 acres or larger for residential development, and especially those with entitlements or the permitting and zoning completed, would be of interest now to some investment groups who are willing and able to buy now at the right price and hold. National builders, or even smaller builders with land inventory, need some time to absorb that inventory. Large land owners who don?t have to sell are holding on until the market improves. That?s not to say they won?t negotiate if they are financially motivated and need to sell the property.
Q: What types of uses do you generally find with large tracts? Mousin: Many are zoned with an agricultural classification, for cattle, crops, and timber uses, for example. The uses vary from single? and multi?family development, for mobile home lots, or for retail. For individual residential buyers, what has become popular are "gentleman?s farms" of five to 20 acres. These buyers are generally those who have never owned land before, but who want to enjoy the space with a house, barn and maybe a few horses.
Q: How did you get into selling large tracts? When I started in Ocala in the mid 90?s I worked for a land development company that would purchase large tracts to develop as residential or commercial and we would market the finished product through the brokerage. We would also handle the development process for clients and advise them of the highest and best use for their land to make the most return. Since I had an equestrian background, I also specialized in horse farms, specifically Thoroughbred training centers.
Source:
www.jalong.com
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