Lot Prices

go do it

i may get slamed for this question

oh well

what % of the price of a spec should the price of the lot be?

as a "generral" rule of thumb some old timers have told me 25%.

i found a pretty good infill lot in a nice but older neighborhood (15 - 20 yrs

old) here in albuquerque for 199k.

but the house right next to the lot is for sale for 489k.

that would put the price of the lot at almost 50%

i know that building a new house in a established older neighborhood and

getting the proper return is a little scary but here in albuquerque lots "up the

heights" where this lot is is very rare.

yes it will be different for different regions

so maybe there is not a golden rule for lot vs house price

Jdove

As far as a Lender or Bank is concerned, it should be around 70/30 split with the house itself representing 70% of the appraised value. Banks and Lenders consider anything more than this standard guideline "High Risk." The last 5 years or so the Lenders wouldn't pay much attention to this guideline but, now that the market has changed Lenders are enforcing all guidelines very strictly.

boman47k

I can't see that ratio working here. Maybe in the higher end markets.

.

Maybe in that situation. Hard to imagine paying that kind of money here to build a residence on.

I have ten acres I gave 21,000 for about 10 years ago. Appraised at 43,000 by the county now. I have to say though, it is in a rural community. But, it is not isolated. It is actually a pretty good midway point for some of the better employment prospects in this area.
For a lot that size, I can see it.

Bob Kovacs

We always used 20% of the sales price as the absolute maximum we'd pay for a lot, and that assumed no variances required, utilities readily available, and a sure-thing sale (as in a neighborhood that would sell quickly). Ideally we liked to be at or under 15%, but definitely no more than 20%. Sounds like you've got a bit of negotiating to do- like down to around $75k.

go do it

so the 25% to 30% old timers rule is still a good benchmark to start with it

looks like.

lot and land prices here in albuquerque have been over inflated for ever it

seems like

so if the owners of the lot get their asking price of 199k (probably not from me)

that would put the price of the house @ 600k - 665k in a neighborhood of

480k houses.

but albuquerque is different from other areas of the country

we are kind of "land locked" in a since

we have mountains to the east no lots up there except in the 500k - 750k
range

and then to the south and north there are indian pueblos so no building there

the rio grande seperates east and west

and then there is the west side full of cheep track homes (for the most part)

and blowing sand with terrible traffic

the people with these infill lots know all this and jack up the price by 100%

i would like to get this lot but maybe the owners need some

market education

bendo2527

I have been told 20% is the Magic Number . I may be wrong.

Ben

Chris Johnson

Come to my neighborhood

the 70/30 split is 70% lot, 30% construction...no joke, well maybe a little

Currently working on one where the lot cost 1.2m, construction expected @ 800k

__________________
Chris

go do it

well is anyone else doing infill lots?

real estate is local for sure

thom

I've been doing specs on in-fill lots for several years, on the west side of abq. You suffer from that east side ignorance of the west side.

There are many houses on the west side that go for $1 million plus. Look at a map sometime, you will find that much of the west side is closer, a lot closer, to downtown than most of the east side.

Lots on the near west side start at about $50,000 and go up from there.

go do it

i was wondering when you would jump in here thom

you are probably right about the near west side being closer to downtown

but how long does it take to get there with the traffic?

i know that there are some expensive houses on the west side that is what

this sentance addresed in a previous post

"and then there is the west side full of cheep track homes (for the most part)"

where are those 50k lots that you spoke of?

i will go on the MLS and do a search

but let me know where those lots are

go do it

hey thom i looked on the MLS and found some of those lots for 50k

some were right on golf course which is like a highway

and some were in valcano cliffs and that area is not to atractive at this time

to many subdivisions sitting vacant like this one http://www.lacuentista.com/

there is a builder in that subdivision i know that stoped two houses mid construction

they have been sitting for a month and that guy dosen't stop for anything

they were specs

no sale prospects i guess

thom

Volcano Cliffs, below the cliffs, is a great place to build specs. There are several lots left, all great locations. The stuff at the top is expensive and, quite frankly I believe, a crappy place to live. Sure there's a great view. There's also basalt a few inches below grade preventing trees from growing.

The cheap stuff is in Rio Rancho, Ventana Ranch, South of the interstate, and some along Unser near the interstate.

The subdivision "La Cuentista" is really part of the Ventana Ranch area. I think it's crap. There are probably some quality local builders who build up there. Unfortunately, their work will get lumped in with and appraised with all the crap being built by the major tract builders. I live just below the cliffs a mile north of Montano.

I've got a pair of lots on the West Bluff I'd like to sell, on the East side of Alamagordo right where it bends and becomes Vista Grande. This is a really strange area, big expensive on the East side of the street, cheap townhouses on the West side of the street.

Chuck A

If you want to build a spec house in this economy, I hope you have a lot of other business to bring in cash flow. Because if it doesn't sell quickly, you'll be making some hefty interest payments. Ask a guy who's been there and done that. Oh wait, that's me!