Ask a Broker: Is it still a good time to buy land?
With shrinking inventory and rising prices, is it still a good time to buy land? What are some things to consider when looking at lots?
A lot of people are looking at lots simply because there is so little inventory to choose from, and if buyers can’t find what they’re looking for, they’re opting to take the time to build the home they want.
As a result, inventory for land is also shrinking. Last year 245 lots sold valley-wide (between East Vail and Gypsum) and this year there are currently 84 lots listed. We’ve seen a good number of large parcels (10 to 40 acres) of land selling near Wolcott and in the Summit at Cordillera. There has been quite a bit of activity in Eagle Ranch as well, with 45 lots selling in the last year. Lots in Eagle Ranch currently have an average list price of $330,000.
With the sales we’ve already seen this year, we do expect inventory for lots to keep shrinking. Now is the time to buy if you want to get into the market before these lots are gone. Even if you don’t build right away, purchase your land now while prices are still fairly reasonable. You can sit on it knowing the investment has been secured and build later. With such a shortage of inventory in existing homes, prices are likely only going to go up.
The most important thing to consider when buying land is that the lot is suitable for building and has the proper infrastructure including water and other utility hookups. It can be advisable to buy lots that are already in established subdivisions where it’s going to be much easier to acquire the permitting needed to build.
Most subdivisions will have design and review boards. It’s essential to find a trusted architect who is familiar with the subdivision or neighborhood you’re building in and already has a relationship with the DRB and is well-versed in the requirements and restrictions. That will make the process more seamless and less time intensive. Your real estate broker can point you in the right direction with a list of architects who make sense for you and what you’re looking to achieve.
Keep in mind the building process takes an average of 18 months. Design and permitting alone can take 6-8 months, so plan on a two-year process from start to finish. Builders are quoting construction costs at between $400-600 per square foot depending on the area and finish level.
With gas prices at an all-time high, it’s better to seek land closer to town where less driving is required and also a consideration for shipping and delivery costs. With low inventory for land in areas closer to the ski mountain resorts, we’re seeing older homes get torn down so buyers can build their dream home in their ideal location. A handful of the current lot listings come with plans that have already been through the approval process and will save both time and money.
Even though construction prices are high, it’s always the right time to start the process towards your dream home — and planning for the future is always going to be a good investment.
Ellyn Courtois is a Broker Associate with Slifer Smith & Frampton at 230 Bridge Street and the Four Seasons Vail office at 1 Vail Road. View market information on her website at EllynInVail.com, email her at firstname.lastname@example.org or call (970) 331-8232.