Ok I expect a certain amount of deception and exaggeration from anyone who sells things for a living but this is ridiculous.
I am looking for a lot to build a house on. First thing out of every agents mouth…oooh land is soooo expensive now…
OK whatever
I look on MLS for myself, tons of property. Problem is, it seems so arbitrarily priced I am totally confused. 3800 square foot lots for $50K, 2 blocks away in the same neighborhood1/2 acre for $110,000.
No difference other than 1/4 mile down the same street. I have literally seen undeveloped 1/2 acre lots in crappy neighborhoods priced the same as nice houses in pretty nice neighborhoods.
Its not even location, prices in very similar neighborhoods go from $50K-$500K per acre along the same half mile of street sometimes.
Is there some legit reason for this or are people just slapping price tags on them to see if someone buys it?
Its fresno CA if anyone wants to do an MLS search and see what I mean. My criteria was >$40K to <100K residential lots pretty much anywhere in the county.
Ignore the 40 acres in the mountains for $75K, we tried to look, my 4wd Honda Ridgeline couldn’t climb the driveway.
I am not into real estate in any fashion but I will say from buying my house that pricing really cannot be wholly arbitrary. Unless you are someone who can write a personal check for the price of the property you, like most people, have to go through a lender. The lender, before handing you that much money to buy the property, will send out an appraiser. If the appraiser feels the property is priced too high versus the going rate for neighboring properties (with some minor variation allowed) they will tell the lender it is a bad deal and the loan will not be approved. Essentially the lender needs to know if you default on the loan they have a good chance of selling the property themselves and recouping their loss.
Living in Chicago I can tell you a 1/4 mile can make a huge difference. Heck…often merely crossing a street can take you from “good” neighborhood to “bad” neighborhood (not kidding…kind of remarkable how sharply delineated it can be). So that may be one aspect to the price differences. Another could be improvements on the property or whether one is on a hill and safe from floods while another is not or one has a view or has something else favorable going for it. Lots of things can affect the price.
IIRC that truck has a ~240hp engine which is a lot for most vehicles. 4wd means nothing except in slippery conditions but if 240hp isn’t enough to get that truck up that hill then very few autos could manage it. I can’t imagine moving into that place…a moving truck would never make it. (My parents have friends in Arizona who moved on top of a smallish mountain…cars could make it up but the moving truck couldn’t…they had to park the truck at the bottom and hire small trucks to shuttle stuff up the 1/2 mile long driveway.)
Real Estate Person Here: The two most important factors with vacant land are size and zoning. The larger the land, the more the price. Zoning for multi-family or commercial buildings is more desirable than single-family.
A lot of factors affect the value of raw land and as a shopper you need to know these inside and out. Size, zoning, frontage, neighborhood, development plans, etc.
Another factor to consider is whether or not the lots are wired for utilities (electric, gas, water) and how easy it is to tap into the system if the lot is not set up for that.
Not a real estate person either, but could the relative paucity of comps be a reason land prices vary?
One way you might check a price for sanity - figure out the cost to build a house, per square foot , in your area, find comps near a piece of land, and subtract building costs to find a comparable land cost. Where I live, Bay Area, the lot is the thing that really goes up in value, not the house itself.
True but look at it this way, the first 3800 sq ft lot is priced at $573,000 per acre, irregularly sized to be almost unusable. Whereas the half acre lot down the street for $110K would be priced at less half that on a per acre basis. I would expect in the same area with the same zoning and same improvements needed you would see some consistent pricing from appraisers. Both of these were on the same residential street less than half a mile from each other.
Understood, I am shopping under the impression that those things will need to be installed or heavily improved upon/repaired. Only a couple of the lots I have looked at have any kind of water or power preparation done, and they were not even the most expensive ones.
Thats kinda what I am doing but more on a per acre basis figuring if the lot is what holds the value that price per acre of land should be a decent yardstick to judge the relative price of land in the area.
I sell commercial real estate for a living. As mentioned by others there’s a lot of inputs that go into determining an asking price. In addition to the rational items mentioned in a hot market you occasionally have nutty or insanely greedy sellers who think the market is going through the roof. They don’t necessarily need to sell so they list it for an absurd price and let some desperate agent put in on the market hoping they’ll get lucky. These kinds of listings often stay (unsold) on the market for years.
Hey drachillix, do you have a limit on how far you’re willing to drive? I’m about 50 miles east of Fresno (I commute in every day) and up here 100K will get you five acres with power at the property line and a well. My email is in my profile if you want to contact me offline.
Lil too far for my commuting tastes, I have seen the listings for your areas like Dunlap and such, its beautiful country. We are considering such possibilities but trying to find a decent deal within 10 miles or so of the city limits due to my business (onsite computer repair). Areas like fowler, Sanger, Selma, maybe even kerman would be doable.
I’ll drop you an email
Might need a mini-dopefst…didn’t know there were any other dopers around here.