Land Costs Have Skyrocketed Over 40 Years

Land Costs Have Skyrocketed Over 40 Years. Image courtesy of imagerymajestic / FreeDigitalPhotos.net

Average land prices have risen over the past 40 years, with the biggest price growth mostly occurring in western and eastern states.

In 1975, all 48 contiguous states and Washington, D.C. had average land values below $15,000. After that year, land costs started a steady climb. In 2015, the cost of land to build an average home has grown to $97,138.

Land value is determined by subtracting the structure cost from the total home value. The data from the Lincoln Institute of Land Policy – a map showing the changes in average land values from 1975 to 2015 in each state.

California and Connecticut were the first states with average land values exceeding $140,000 in 1988 and 1989, respectively. By 1999, the majority of states had average land values over $15,000 – the central states and Alaska being the exception in remaining below $15,000.

It was the period from 2000 to 2007 that land values quickly appreciated, however. By 2007, many states had average land prices that were greater than $140,000, such as Nevada, Florida, New Jersey, California, Arizona, among others.

But from 2008 to 2011, the financial crisis sparked a plunge in land values across the country. The sharpest price reductions in land costs were in Nevada, Arizona, and Florida.

Land values are still recovering, although mostly not at the same levels as in 2007. What’s more, land values in a few states, such as Oklahoma, Mississippi, West Virginia, and New Hampshire remain below $15,000.

View an animated map showing the rising costs of land over four decades.

Source: “This Animated Map Shows the Rising Cost of Land in the U.S. in the Past 40 Years,” Howmuch.net (July 14, 2015)

Report Calls for a Bigger Fight Against ‘Blight’

Report Calls for a Bigger Fight Against ‘Blight’. Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

Communities are confronting different types of blighted properties, from littered and vacant lots to foreclosed and abandoned homes, according to a recent Keep America Beautiful report. Blight that causes physical changes to properties can cause “harmful impacts on the lifecycle of neighborhoods and their residents,” says KAB President and CEO Jennifer Jehn.

Blighted properties are characterized from foreclosure and bank repossession to tax delinquency and environmental contamination, the report notes.

Vacant homes can cost municipalities anywhere from $5,000 to $35,000 in police enforcement, fire services, nuisance abatement, and environmental clean-up costs, according to the report.

Blighted residential properties can impact the values of nearby homes. Property values within 500 feet can see a decrease to value by as much as $7,000.

The report calls for community leaders and lawmakers to address blight with numerous initiatives, such as urban greening (like community gardens), land banking, and property manager programs, that strive to restore blighted communities to the mainstream real estate market.

Source: “Blight Knows No Bounds in New Economy,” RISMedia (July 15, 2015) 

What First-Time Buyers Are Willing to Sacrifice

What First-Time Buyers Are Willing to Sacrifice. Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

A new survey shows that consumers saving for a home are willing to forego modern conveniences in order to secure a down payment. That may even mean giving up phones, Internet, cable TV, or Starbucks, according to a newly released survey by the business advisory firm the Collingwood Group.

Potential first-time home buyers are making such sacrifices because they want to be able to make a sizable down payment on their home purchase. Nearly two-thirds recently surveyed by TD Bank say they’d like to put 20 percent down or more on their home purchase. The bank polled more than 1,000 consumers who were not home owners but intended to purchase a home within the next five years.

First-time home buyers are increasing their ranks lately, with their share in the housing market rising to 32 percent in May. That matches their highest share since September 2012, according to the National Association of REALTORS®. A year ago, first-time buyers represented 27 percent of all buyers.

The survey showed that around 62 of potential first-time buyers are making plans to purchase a home within the next two years.

“It’s encouraging to see interest from the first-time home buyers, who have been cautious for much of the housing recovery,” says Scott Haymore, head of pricing and secondary markets at TD Bank. “Consumers are gaining confidence in the economy and many are looking to enter the housing market within the next two years.”

Some additional survey findings include:

• More than two-thirds of consumers – 68 percent – who say they’re looking to purchase their first home say they want a move-in ready home, while one-third said they’d buy a fixer-upper.
• Forty-three percent of consumers say they’re looking to buy their first home in a suburban area outside of a city compared to 20 percent who say they desire a home in a big city or metro area.
• Respondents ranked the most desired amenities in their first home as a backyard or pool, an attractive design, and energy efficient/smart home technologies.
• The largest barriers preventing respondents from purchasing their first home was the need to save for a down payment and pay down debt. Also, more than one in five consumers – 22 percent – who are looking to purchase their first home said they couldn’t find a home in their price range.

Source: TD Bank First-Time Home Buyer Pulse and “Report Says More Millennials Value Home Ownership Over Conveniences,” MReport (July 14, 2015)

Obama Lauds HUD’s New Fair Housing Rule

Obama Lauds HUD’s New Fair Housing Rule. Image courtesy of vitasamb2001 / FreeDigitalPhotos.net

President Obama says the Fair Housing Act and the latest final rule issued by the U.S. Department of Housing and Urban Development will help ensure all Americans get an “equal shot in life.” Obama devoted his latest weekly address to talking about the Fair Housing Act and battling discrimination in housing.

HUD last week issued a final rule on Fair Housing that aims to “equip communities that receive HUD funding with data and tools to help them meet long-standing fair housing obligations in their use of HUD funds.” The rule aims to help local governments identify patterns of racial and ethnic discrimination. HUD will issue maps, charts, and other data showing racially or ethnically concentrated areas of poverty; the location of subsidized housing; and where wealthier people have access to greater community assets like top-notch schools and job opportunities.

“The work of the Fair Housing Act remains unfinished,” Obama said. “Just a few weeks ago, the Supreme Court ruled that policies segregating minorities in poor neighborhoods, even unintentionally, are against the law. The Court recognized what many people know to be true from their own lives: that too often, where people live determines what opportunities they have in life. … In some cities, kids living just blocks apart lead incredibly different lives. They go to different schools, play in different parks, shop in different stores, and walk down different streets. And often, the quality of those schools and the safety of those parks and streets are far from equal – which means those kids aren’t getting an equal shot in life.

“We’re using data on housing and neighborhood conditions to help cities identify the areas that need the most help,”Obama said. “We’re doing more to help communities meet their own goals.”

Watch the President’s full address below.

Source: “Obama: New Fair Housing Rule Will Help Further the American Dream,” HousingWire (July 13, 2015) and “HUD Announces Final Rule on Affirmatively Furthering Fair Housing,” RISMedia (July 13, 2015)

The 10 Most Stable Housing Markets

The 10 Most Stable Housing Markets. Image courtesy of holohololand / FreeDigitalPhotos.net

Housing markets where home values grow too rapidly can quickly turn sour. That’s why many home owners may prefer moderate, steady price growth.

“Housing market stability isn’t only good for financial health, it’s good for a home owner’s mental health too,” notes a new analysis by SmartAsset.

SmartAsset evaluated the price growth among U.S. cities to determine which ones have seen historically stable growth. The following are the markets that have seen consistent rises over the past 25 years, with few downturns:

1. Boulder, Colo.: Home prices have grown an average of 4 percent a year over the past 25 years.

2. Austin, Texas: The housing market here is one of the hottest in the country but unlike other boom-markets, prices fell just 3.4 percent here during the housing crisis.

3. Bismarck, N.D.: The average home owner who has purchased a home in Bismarck has never seen prices fall 5 percent or more there in the past 25 years.

4. Midland, Texas: Prices have risen by an average of 3.3 percent annually over the past 25 years.

5. Casper, Wyo.: Home prices have risen an average of 4.7 percent annually.

6. Anchorage, Alaska: The city has seen annual average growth of more than 3 percent since 1990 but it has not seen any significant price declines in that period.

7. Billings, Mont.: With a low unemployment rate, home prices have stayed steady over the last 25 years.

8. Walla Walla, Wash.: Home prices have increased nearly 30 percent since 2005 and only temporary losses were seen during the housing crisis.

9. Odessa, Texas: Home owners here only had 4 percent odds of seeing prices decline of 5 percent or greater over the past 25 years.

10. Houma-Thibodaux, Louisiana: The average annual price growth here has been 2.8 market.

Source: “The Best Housing Markets for Growth and Stability,” SmartAsset (July 8, 2015)

This Isn’t Your Dad’s Retail Land Ownership

This Isn’t Your Dad’s Retail Land Ownership. Image courtesy of stockimages / FreeDigitalPhotos.net

Buying real estate is perhaps the most common way for average people to build wealth, but if they’d like to try to take that another step, one of America’s oldest department chains is ripe for real estate investment.

Seritage Growth Properties, the real estate investment trust spun off from Sears, has gone public, selling shares to any interested investor. This lets Joe and Jane Public become one of the landlords of Sears and Kmart stores, in a sense.

The REIT has two goals, according to Consumer Reports’ Consumerist blog: “raise some cash to help the retailer, which is still losing money as well as losing Kardashians, and perhaps attract some investors who don’t see the value in Sears, but do see the value in the company’s real estate.”

The offering has raised $1.6 billion, according to the Wall Street Journal. According to the Journal, Sears CEO Eddie Lampert expects the bankroll to help the company become a more modern retailer as it slims down its business. The company also expects to sell some of its real estate and close some stores.

Source: “Sears-Affiliated Real Estate Investment Trust Raises $1.6 Billion,” Consumerist.com (July 7, 2015)