Lot availability hit a record low according to new data from the National Association of Home Builders
By Jeff Sorg, OnlineEd Blog
(June 2, 2016) – Lot availability hit a record low according to new data from the National Association of Home Builders (NAHB). Sixty-four percent of builders responding to specific questions in the May NAHB/Wells Fargo Housing Market Index reported that the supply of lots in their markets was “low” or “very low”—up from 62 percent last year, and the highest that number has been since NAHB began collecting this data in 1997.
Notably, this record shortage comes at a time when new homes are being started at a rate of under 1.2 million a year. In 2005, when total housing starts were over 2 million, the share of builders reporting a shortage of lots was 53 percent.
“The lack of availability of buildable lots has quickly become one of the biggest issues facing our members,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “While labor shortages and regulatory burdens remain struggles as well, lot shortages are preventing our builders from responding to growing demand for housing.”
“We have monitored lot availability for the last two decades, and it is clear that the scarcity of building lots is growing,” said NAHB Chief Economist Robert Dietz. “Whether due to land use policy, geographic constraints or other regulatory constraints, the lack of lots for residential construction will have negative impacts on housing affordability in many markets.”
The survey results varied somewhat, based on the region of the country, the size of the builder, and type of lot. The dearth of developed lots is most apparent in the Western regions of the country, where 39 percent of builders said lot supply was “very low,” compared to 23 percent in the South and 18 percent in both the Midwest and Northeast. When referring to premium “Class A” category lots, builders in all regions reported similar opinions of widespread shortages.
[Source: National Association of Home Builders press release]
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Jeff Sorg is a co-founder of OnlineEd®, an online real estate, mortgage broker, and vocational school founded in 1997, where he also serves as Chief Executive Officer, and School Director. Sorg holds vocational and post-secondary school instructor licenses in several states and has authored numerous real estate continuing education and pre-licensing courses and has been awarded the International Distance Education Certification Center’s CDEi Designation for distance education. Memberships include ARELLO (Association of Real Estate License Law Officials), the National Association of REALTORS®, Oregon Association of REALTORS®, and Portland Metro Association of REALTORS®. Awards and service include REALTOR® Emeritus in the National Association, Life Member award in Portland Metro Association and Chairperson of the Oregon Real Estate Forms Committee.
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