Data released by the FDIC last week, showed that bank lending for land development and new home construction is trending upwards, after hitting a 14-year low last year. In the time since the real estate market began it’s rebound locally, builders have been fighting for developed lots – often overpaying for them, which has been reflected in the price of new homes and has limited the available inventory.
Not wanting to take the time to develop land while the market’s hot is understandable, but it also eliminates a segment of buyers who can no longer afford it. Developing more land increases the inventory and allows builders to price homes based on lower land costs, which translates to better prices for consumers.
Of course, it can take time to develop land so we might not see an immediate impact, but it’s certainly a positive sign. Click here to read more from MSN Real Estate or connect with us to learn more about the metro Detroit real estate market.