Monday, December 10, 2007

Fraser Valley Real Estate

I recently attended a seminar that covered the current trend of development land in the Fraser Valley. The following trends were covered:
*Demand for development land is high in the FV
*The market for development land is still rising.
*Development land in the FV is selling on average in the 700,000 to 1,000,000 per acre.
*Developers are building up as opposed to building out
*Many small individual sites are being purchased, assembled, rezoned and then flipped.
*Development sites are being purchased and flipped in 12 to 24 months for a 25% to 50% return.
*Difficult parcels to develop (i.e.topographically challenged and or creeks) are selling at a premium (all the prime sites are gone).
*A premium is being paid for land designated as future development sites - 10 years and beyond.
*This point I found most interesting - investors are coming in and snapping up multiple units during the project presale.

REM: This market is definitely still hot. Given the high price paid per acre, poor quality of the land, high construction and labour costs it leaves me wondering how much profit is expected, say 15% - 10% - maybe less. It all comes down to how much they can sell the finished product for, apparently the sky is still the limit. Considering the flipping land for huge profit and investors snapping up the presales it seems as though this market has its share of investors selling to investors.

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