A new data report by Zillow (NASDAQ: Z, ZG) found more than 300,000 empty lots measuring 5 acres or smaller were listed for sale on its platform in June, which accounted for 17.4% of all listings. The Seattle-based brokerage added that if one home was built on each of those lots, it would bring the total housing deficit down to roughly 4.44 million homes, reducing the nation’s housing deficit by 6.3%.
Zillow noted the typical lot for sale on its platform is 0.57 acres, which is large enough to support more than one home. The five states with the highest number of empty lots listed for sale are Florida (42,601), Texas (40,907), California (18,508), North Carolina (14,226) and Georgia (10,334).
Zillow added that the empty lots listed for sale in North Dakota, South Dakota and Alaska accounted for more than one-third of all for-sale listings — 45.9%, 38.7% and 34.6%, respectively.
The majority of the empty lots are based in rural markets – 25.3% of all for-sale listings, compared to 13.6% in the suburbs and 9% in urban areas. Rural lots are also the least expensive on a per-acre basis with a median of roughly $75,000 per acre, compared to more than $181,000 per acre in suburban areas and about $500,000 per acre for urban lots.
“The more than 300,000 lots currently listed for sale represent the lowest-hanging fruit in addressing a housing shortage that’s two decades in the making,” said Kara Ng, senior economist at Zillow. “The challenge is making it feasible to build. Loosening zoning rules, streamlining permitting and expanding access to financing would reduce the cost and uncertainty that hold construction back, turning available lots into much-needed homes. The ROAD to Housing Act is an encouraging sign that policymakers understand what it will take to close the gap, but some of this reform will need to happen at the state and local levels.”
Some lots are not selling because the seller is unrealistic on their asking price. My neighbor down the street sold his house to a developer for way more than it would have sold for at the time(even when prices were pretty inflated). The developer cleared the lot and marketed it as suitable for dividing into four separate lots (it’s .89 acres). They were asking $1Million for it. What they didn’t take into account is that it’s at the end of a relatively narrow dead-end road that has homes on one side and a combination school/YMCA on the other, complete with school buses and school drop-off/pick-up traffic. The listing was finally canceled after 6 months, and the YMCA/school parents use it as extra parking. It’s an eyesore, though, because no one is taking care of it and people go down there and drink and hang out. The buyer paid so much for it, though, they can’t really lower the price that much. So, just because a lot is empty doesn’t make it a good deal for someone to build on.
And the reason those lots sit vacant are from government gouging for impact fee’s, no available municipal water or sewer supply, causing additional exsuberant costs for well and septic systems. Rediculous building codes, and energy efficiency requirements, Figure that out, and building will boom!!!!
Yes this is exactly what I’ve been preaching to all that will listen! We have the natural resource (the land) at our fingertips. It can be viable to build on much of this, but from what I see, few are considering this option mostly due to the lack of know-how, direction, intimidation and funding sources. I built my first home 25 years ago when the market my husband and I were looking in had little existing home options and relatively very expensive at the time. So we decided to purchase land in the area and build. Didn’t know a single thing about ground-up construction, but was determined to make it work. Got all my ducks in a row and found a hard money lender that funded 100% of the cost plus most of the land acquisition. My husband was very intimidated and said I had a lot of guts. The risk didn’t scare me, I knew it was a matter of keeping organized and on budget. This was the start of our spec building journey ever since and set us free for retirement.
A hard money lender means a huge interest rate. They will give put construction loans..buy things are way different now then tjey were 25 uears ago. 1 you jave to get a contractor GC to make ot go..for a loan..then perk amd spil.amd water tests..then digging a well..if ots not coty water ..not to mention the building permits and code compliance from the city.
This is a blanket statement and not always the case. Not all lenders are the same and regulations vary drastically in different jurisdiction’s. There are ways to maneuver. Not trying will get you nowhere.
How much of this land is actually buildable.. This is a very shallow article
The percentage of land that is “actually buildable” was not cited by Zillow.
LOL, the 8,000 gorilla in the room is 50 million illegals, many of whom in blue cities and states are being given cash to buy and rent. The people wringing their hands about this so-called “housing deficit” and “affordable housing” created the “crisis.” Remember, Obama nationalized student loans and 9 years later bemoaned the “student loan crisis.” The government allowed or caused the 2008 crash…WRE is part of the problem…
Why is WRE part of the problem? We are reporting the news, not conducting federal housing policy.
Have you ever mentioned the CAUSE of the problem or asked if the problem is real? Journalists seek more information and truth. Have you ever mentioned illegals and the simple economics of supply and demand? The government put out a report recently explaining this cause and effect. Have you ever reported that? Have you ever done any investigative journalism on this subject? Do you just repost what others say without question? Critical thinking seems to be a lost art…
This was simply a news story on a Zillow report on building homes at empty lots. It was not intended to be a dissection of immigration policies.
You’re not! The Feds caused this mess on so many levels. People will take advantage of whatever programs are legally available at the time. Can you imagine homeowners or buyers saying “oh, I’m not going to willingly benefit from a 3% mortgage rate because it will inflate housing prices and screw things up for the next generation”. I think not.