BusinessWeek profiles trends seen in the Dulles area: cash rich home builders jostling for land for new housing projects.
“…land is the main factor in real estate’s roller-coaster cycle.
When housing prices boomed in the middle of the last decade, it wasn’t the structures that were suddenly deemed more valuable but the land.
…the price of U.S. land used for houses and apartments nearly tripled from the beginning of 2000 to the end of 2005. Prices more than tripled over the period in Washington, Miami, Tampa, San Diego, Los Angeles, and Phoenix…”
Dulles area residential developers began selling off expensive parcels in 2006 when it was evident the bloom was off the housing boom.
The Route 50 corridor in Loudoun County is especially noteworthy for declines in land values and stands poised for future land transactions for new home developments.
Key is the December 2009 7000 acre foreclosure purchase of the defunct Greenvest property by Rockpoint, a Dallas based REIT.
Purchased for $105 million, or about half of Loudoun County’s current annual deficit of $192 million, some projections have developed land values at $1 billion.
REITS typically demand similar returns for their cash investments.
Building homes requires few or no loans from banks to construct eliminating the tightfisted bank decisions commercial developers face.
Numerous shopping centers are in a holding pattern in the Dulles area while home building is ramping up.
