Incrediblely tight market

[Jay Hinrichs]

Was searching MLS just now.. Looking for buildable lots in the Portland Or. metro area.. 2 million people in the metro area.

Exactly 144 lots on the open market that are shovel ready and 5k sq ft to 15k sq ft.

this in a market that traditionally builds 4k to 7k new homes per year, 1990 to 2008...

in 08 we build 10,000.. in 09 we built 700 and just about every builder developer and sub went broke or left for Mexico.

1500 in 2010

2500 in 2011

3500 in 2012

4000 in 2013.

No one prosecuting any new plats from 08 to now.. WE have a huge shortage of land obviously and lot prices in many areas have doubled in the last year.. Average price last year was about 80k today 169k...

So what to do buy every lot today at market price and corner the market. Could be a good thing. Wait for prices to come back down ( don't think so) we have an urban growth boundry so no sprawl allowed.. You think existing homes are going to rise... I think so pretty easy to see that. Is this why every new home I build is sold at or before the framing stage YUP...

but we really can push prices too much because we play heck with appraisals.

Wild times in reverse of 07 to 09

There is a really cool town called Hood River ( world famous for Kite boarding on the Columbia river) I am just finishing 24 lot subdivision there last 4 are in the air... Was checking on lots last night there and there were less than 10.. And Only 3 new construction homes on the market with 2 of them being townhouses on almost vertical cliffs ( so not for everyone) so one SFR on the market.. I had a lead on 5 of the last lots left in one of the lst subs. not on the market I offered on 3 lots all cash close in 30 days 100k a piece. Hope to get them.. Now the spreads are not what you guys talk about in texas and other areas. I will build 2200k sq ft for about 200k all in. ( subs are higher in this little town of 8k) and will sell at 410ish.. and happy to make 50k a door net all in...However will be in and out within 4 to 5 months house will close within 3 days of the CO ( certificate of Occupancy)...

JLH