Every six months or so I attempt to delve deeply into the dark underworld of selling lots and land in this housing depression in order to update our clients. Our clients who own buildable parcels of land believed they had some of the best investments in real estate, and they did at one time, but they have become the most disappointing to them and the most difficult of properties to sell. In a former article we analyzed the dynamics of this market niche and the challenges we now have.
In another recent article we noted some very good news in the new construction sector; see Is There a New Construction Renaissance?
If you have followed our monthly Market Action Reports with its commentary you know that we are very encouraged with the housing market’s performance since September of 2011. We now have more than a sign of something good, we have a trend of good which we are optimistic will continue. Our sales numbers are double a year ago, we have more showings, and we are dealing with more offers than in any similar period in almost 5 years.
At the end of this first quarter, I cannot say that there is much that will inspire you but perhaps a bit that will give some hope. In Yamhill County, which is over 700 square miles, there have only been 16 sales in the last 12 months for land over 3 acres. Sales ranged from 5 acres in Willamina for $100k, to 203 acres for $855k (vineyard potential) in Carlton. However, there are currently 4 pending sales and that is a significant improvement consistent with what we have seen in the overall market. What is still foreboding is that there are still 88 active listings to compete with and at the current rate of sales this is another 5.5 years worth of inventory.
Looking longer, in the past 5 years there have been 75 Lots & Land properties of more than 3 acres sold. That is 1.4 properties per month. Since the financial meltdown at the end of 2008, there have been 50 sales or 1.3 ppm. By contrast, In 2012 so far there are already 6 sales or 2 per month plus 4 pending sales. There is some improvement and movement in the right direction and better hope for this year.
What does it take to sell today?
- Everything is about value right now. In the same way that builders had to let go of the past and deal with today’s realities in order to build again, so the sooner our properties can be price competitive for today’s market the sooner it will sell. Competitive pricing does not mean being the lowest price but being the best value.
- Being competitive is tough! With 88 choices competing for 16 sales (as demonstrated during the past 12 months) it can seem hopeless. However rural properties are also about the appropriate location for a buyer and the aesthetics of the property. Keep the property in good shape ready for someone to buy and build immediately.
- Patience: Our clients have been unbelievably tolerant of this market and patient awaiting a return to normalcy. Loyalty to us has been encouraging. We believe this year is a good opportunity but next year perhaps even better. We are trending in the right direction but no one thinks things will move rapidly. We are glad to have your property available for the buyers as they begin again to trickle into the market place.
We are happy to review pricing and we renew our commitments to you with each listing extension. Attached you will find all the current data for the Yamhill County markets and we can custom do the research for you specific to your property just for the asking.
Randy McCreithRandy McCreith, Principal Broker
Bella Casa Real Estate Group