A good sign of recovery…Land is in demand!

Reuters recently announced investors are cashing-in, in the most depressed housing markets in the U.S. Now there is high demand on land deals in areas like the outskirts of Vegas to the coast of California, stretches of undeveloped land already showing Home Prices climbing and signs of Fed Boosts Recovery.

 

Money managers bought at the lowest prices during bankruptcy proceedings, from cash-strapped home developers and banks that seized the properties after foreclosing on them when builders ran out of money. They held on to these tracts of land and waited for the right moment to cash-in. They are now reselling the land to investors for returns in excess of 20 percent (ROI), and this appears to be the right time since homes sales are rising, foreclosures are slowing down and lowest interest rates remain steady.
In addition, some of these investors are even looking to partner with home builders to develop the tracts. Others are still waiting before re-selling to buyers. A Money manager of the Paulson & Co portfolio, the Paulson Real Estate Recovery fund, which has under $500 million in assets for the $19.5 billion hedge fund, is of the opinion that "Land is the highest returning component of the home building equation." …And that applies to other areas that were hit hard after the housing bubble burst. Is it also happening in South Florida tri-county areas?

Broward county has in excess of 130 miles of inland waterways. Regardless of the fact that there is limited amount of available land, a significant “rehab”construction is also on the upswing as applications for building permits are on the rise. Though building new homes is more lucrative, it could take years to build them, and rehabbing can be done in a few months. Also as foreclosures slow down, investors are rushing in to raise money to buy foreclosed homes from the nation's banks and then rent them out. They’re being cautious as the housing market is improving but we’re not quite there yet.
One thing is for sure, there is going to be land shortage coming out of the downturn. Investing in Florida, Arizona, Nevada, Texas and California, Colorado in some form of distressed sale is already having very successful ROI already with a greater potential. Ross Perot Jr's Dallas-based investment firm, Hillwood Development, is one early buyer of land now cashing-in on its bet thanks to signs of a revival in housing markets in Nevada, California, Texas and Florida. During the recession, Hillwood bought shovel-ready land from cash strapped home builders. Lennar to Beazer Homes and DR Horton show signs that it's evidence of a housing recovery starting to get its legs.