Vail Daily column: Should I buy a lot now?
I am thinking of buying a lot to build on in the future, but I’m wondering if I have waited too long, or not long enough. With the real estate market downturn in 2009 through 2011, lot prices seemed to plummet all over the valley. Now they have come up, some have doubled, but still not what they were in 2007 and before. One lot I saw sold for $120,000, then went back to the bank in a foreclosure, came on the market later for $40,000 and actually sold for $20,000. Now the owner is asking for over three times what they paid for it, but it is still well under its price of six or seven years ago. Get out your crystal ball and let me know if you think that there could be another downturn like the last and I should wait, or do you think prices will continue to climb and I better buy now?
Dear Worried Lot Buyer,
First of all, we know you are not talking about Vail and Beaver Creek fabulous view lots and ski-in/ski-out lots, as they did not plummet in price, they just simply slowed in the time it took to sell them, as they always have continued to be coveted entities. But, yes, you are right about many of the western Eagle County subdivision lots. As far as the crystal ball goes, we are better to just look at the facts.
There are many factors affecting lot pricing right now: low inventory of homes in certain price ranges, costs of building, consumer confidence and financing available. Builders are starting to build a few spec homes as the inventory of well priced homes dwindles. If you believe the census predictions, then we will be needing new homes just to accommodate our projected population growth in the next few years.
It is once again possible for builders to get reasonable financing to build homes, which was not true for many years. The public loves new homes and the buyers are now employed again and feeling that things are getting better on most fronts in the economy. And finally, banks are making lower down payment loans to help the average buyer become a homeowner again, not to mention the great interest rates.
IT COULD BE TIME
I would say, if you have the money and have the desire to build a market priced spec home, or your own home and/or the ability to hold on to the lot for up to five years, then it could be the time to make your purchase. Legally, as a Realtor, I can never say it “will” be a great investment, or even that it will appreciate at all.
However, I personally believe prices will continue to rise in the next few years. Although it might not be rock bottom pricing now, it still is “very good” pricing and, likewise, interest rates are still excellent, even though maybe not quite as fantastic as in the past 24 months. I wish you well if you decide to make your move now. Moving forward always feels better than indecision.
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.SkiAndTeeHomes.com.