Will “Land only” values fall?

[Alex V.]

Good morning,

Wondering if during the last down turn, or any down turn at all, did “land only” values fall very much? God only made so much of it after all.

I’m speaking more specifically about “buildable Lot” land values in an area that does not have copious amounts of new land being developed. Supply and Demand. This area also happens to be a suburb of DC and Annapolis, MD.

I’m in a position that I am intending to build a new home for myself. I am paying “cost” meaning builder level cost for material and minimal average labor costs with no profit for the builder of record. And that’s because I am the builder of record myself and I will be taking my profit when I go to sell the house years down the road.

There was $325k in actual profit potential on this deal before the virus hit. I realize it may go down from there, but I doubt very seriously the material cost will be majorly impacted in a negative manner for us. So buying at rock bottom prices all the way around the table, including the land, (I’m under contract 40k less then the appraised value)...where can I lose if I’m building at cost?

-So I’m wonder what people’s thoughts are on this if you were in the same position, would you move forward and build the home?

-Do you see a potential loss occurring?

-In land value or on the sticks and bricks of the home?

Thanks for the input!