If lot sizes are smaller and production is down, why did lot prices reach the highest they have ever been? Between building in more urban, dense areas and increasing regulation cost, the reasons for the higher average price becomes more clear when you consider the economic landscape.
Land prices reached a record high in 2018, the National Association of Home Builders said on Monday.
The median price of a single-family building lot rose to $49,500 in 2018, a 4.4% gain from a year earlier, said the NAHB. That’s about double the rate of inflation for the same period.
“Given that the nation’s lots are getting smaller and home production is still significantly below the historically normal levels, it might seem surprising that lot values keep going up,” NAHB said. “However, the rising lot values are consistent with persistent record lot shortages that NAHB reported recently.”
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