News & Opinions
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Lots of Catch-Up
Brad Hunter / Metrostudy / August 11, 2014
We have been talking for years about the lot shortages that builders are facing. Now, it’s time to talk about how many lots are being developed. Builders and developers are now playing “catch-up,” with builders buying land and lots and developers/investors paving roads and putting in infrastructure to serve the builders’ needs at a frenetic pace.
The pace of lot delivery (completion, ready for the builder) has gone up 140% in the past two years, much faster than the pace of housing production has risen (+84%). Despite this increased pace, lot development STILL lags the pace of home production nationwide.
In some markets, the lot production machine is in full gear, and has caught up with demand. This is a good sign for builders, and a vital turning point for home production in 2015 and beyond.
The TOP TEN states for lot production in 2Q14 are:
|State||2nd Q. Starts||2nd Q. Lot Deliveries|
Note that lot production has caught up with new home production in California, Arizona, and Utah. Florida development is woefully far behind demand for lots, hence the skyrocketing cost of finished lots there.
Metrostudy defines “future lots” as those that are in the pipeline (some are pre-entitlement), and Florida has the deepest pipeline. Below are the top 10 states ranked by known future lots.