If you think it’s difficult to sell an existing home, try selling the idea of building a new home in the country. Northwest Hennepin County includes the cities of Medina, Corcoran, Independence, Greenfield and Rockford. There are 117 lots for sale on the MLS. Only 1 is pending and only 3 have sold this year. At the sales pace of 1 per month, there is a 10 year supply of lots in Northwest Hennepin County.
I don’t expect this to remain a 10 year supply for very long. We do probably have a year or two before this part of the market starts to turn, but that supply number could be cut in half very quickly once the market turns. It’s also not quite as easy to compare land and lot sales to existing housing sales. Many land owners had carved up farmland that was already paid for and they are trying to increase the value of their farmland by ten fold by turning it in to a lot for a house. However, if you’re a developer who has poured a significant amount of money in to developing some land, these kinds of numbers become very, very intimidating.
And yet…the odd thing is that lot prices don’t seem to have come down much. One would expect that they would given the lack of sales activity. So far the landowners and developers have tried to hold their price.
