By Mike Sunnucks | Rose Law Group Reporter
Competition for land continues to heat up across the Phoenix region as home builders look for land to build new homes.
Those same builders are running out of land and lot supplies to build new homes as buyers continue to exhibit strong demand.
“Builders are pretty aggressive with searching for land. It’s because the finished lot supply is pretty much gone,” said Steven Hensley, market manager for real estate research firm Zonda. “It’s spoken for.”
Builders have been dealing with low supplies of lots and lands for a while and need to acquire more parcels to accommodate future growth.
Hensley said there is plenty of competition and bidding wars for available farmland, vacant desert and Arizona State Trust land properties.
“It’s a very competitive space right now,” Hensley said.
The need for lots and the continued demand also has builders buying large swaths of land to accommodate expected growth over the next two to three years, he said.
Hensley said builders are looking at land that can accommodate 150 to 200 lots whereas before they focused on 100-lot increments.
Part of that dynamic is that land prices are rising due to the high demand. Consequently, builders will need to build more new homes so land deals can pencil out, Hensley said. “It just has to be bigger,” he said.
Hensley said builders are also continuing to look for available land in farther out suburbs as well as for infill opportunities in popular submarkets such as Scottsdale, Gilbert and Chandler.