New York Times  |  June 23, 2008

Investor demand for undeveloped land is increasing as prices decline in many areas.

The decline is fueled by developers and individuals who are unloading property they previously bought to build on.

Real Capital Analytics, a research firm, says the exodus of some developers has pushed prices down substantially. Real Capital says the price per buildable square foot on land earmarked for retail development averaged $44 so far this year, compared with $79 in 2007, while the average price for land for condominiums was $87, versus $151.

“I haven’t seen this market in 20 years,” says Jaime Raskulinecz, a real estate investor and property manager from Verona, N.J., who wants to buy land in the hard-hit market of Cape Coral, Fla. During a recent visit there, she found lots for sale on or near the water at about a third to half below their peak prices of two years ago.

Investors in raw land need cash to spend because financing is hard to get. They also must be able to pay the property taxes, keep liability insurance on the property and provide upkeep. The possibility that there might be contaminants hiding there is also a risk.

Source: The New York Times, Vivian Marino (06/22/2008)