There are some interesting options for investors when it comes to trends of land investment market.
Land is limited and like any such resource it increases in value when scarce. Price of land in good locations can be very high and offer brilliant investment returns.
No doubt land investors aim to earn profit by making this investment. There are land investors of many kinds, from individuals looking to construct a home to those who keep it as land bank to real estate developers who want to build a next project. All investors wish that there in increase in the value of their asset to make their land investment profitable.
One has typically seen good profits in land investment. There is an impact of market trends and they offer chances for different land investors. Some market trends to watch for land investors.
Scarcity of Finished Lots
Development of residential real estate almost came to a stop during economic downturn and even banks were not lending money for it. Housing sector was almost out of business as homeowners and builders stopped buying land. With slight improvement in the economy, there is growth in the housing market and the demand for developed plots where houses can be built readily has gone up. Some lands that were in the pipeline and had stalled during the downturn have now been bought by builders to make new homes. There is demand for more finished land by builders and this has increased investment opportunities.
This means that short term fully-finished lots investment is improving in value. You can check the infill, secluded lots and that have been overlooked by large builders who are focusing on large neighborhoods of finished lots. Investors who are ready to do groundwork can get in touch with builders as advance buyers and help to clean issues facing the portfolio of unfinished lots. They can expect quick return.
Slowing of Suburban Sprawl
Downtown areas of several cities have been re-energized in the past few years. Rising fuel cost, time saving and decreasing home cost has seen people shifting from the suburbs towards the town centers. Combine downtown renewal with the fact that fewer homes were bought in the suburban and rural areas during the housing downturn; it has slowed the growth rate of suburbs.
This does not suggest that suburbs are over but they have seen slower growth. They are also challenged by smart developments that seem different from typical suburban dead end neighborhood. This means that if you buy land in rural area you may have to wait longer for increase in value.