Development Sites Are Highly Sought After
Only four or five years ago I used to avoid taking listings for vacant land. There had been very little development from 2007-2012 and the only way to sell a vacant parcel was to price it so low an investor would purchase it with no plans for development, but knowing someday the market would turn around. I would tell most sellers that they were better off holding a property than trying to sell it while demand was practically non-existent. Well folks, development is here, demand is back, and the tides have shifted!
I’ve seen more development parcels go under contract this past year than ever before in my 15 years in real estate. I’ve got 4 listings for vacant land ranging from $449,000 to $2,950,000 that are all under contract and the developers are going full steam ahead with due diligence and site plan approval. Development plans encompass multi-family housing, hotels, retail, industrial and office space. I sent an email blast for a high-profile corner on S. Airport and Division last week and I already have multiple offers on the parcel. If there is development land in a good location, it is going to get some serious consideration from developers these days.
According to Northern Great Lakes Realtors MLS, there were 20 commercial pieces of vacant land sold in Grand Traverse County during the past 12 months. In 2008-2011 only 19 properties sold over the 4-year period. The number has gradually been increasing each year with 9 sales in 2013, 15 sales in 2014, 16 sales in 2015 and 19 sales in 2016. With 14 properties currently listed as ‘under contract’, 2017 is sure to be a record year for commercial land sales in our area.
The average sale prices have also been increasing. In 2008-2015 the average sale price was in the mid to low $100,000s. The past two years the average has run much closer to $200,000. We are also seeing more high-end pieces of property exchanging hands. In 2008-2015 we saw an average of 1 property per year sell for more than half a million dollars. In 2016 & 2017 we have had 6 sales over this price range. Currently I’ve got two properties under contract for over a million dollars (and a third coming) so I think it’s safe to predict that this trend will continue into 2018. It is fun to drive around town and watch the progress of new construction and see businesses expanding and coming to our market. I think we will get to enjoy that for the next few years as the trend seems to be accelerating.
Dan Stiebel, CCIM