There is an ample supply of building lots up for grabs these days, but real estate consultant John Burns doesn't think there is much of a market for them, at least not from the nation's largest home builders.
During the heyday of the housing market, publically traded builders like KB Homes and Lennar owned or controlled 2.2 million building lots. But since the sector hit the skids, they've built on roughly 200,000 of them and cut their lot holdings to just 700,000.
That leaves 1.3 million building sites that have gone back to lenders, sellers or land bankers. Burns, who's based in California, says many of these lots are so far off the beaten path that they are "worthless except for farming."
He noted that, "For those with patient capital, such as family money, we advise purchasing the lots in outlying areas and holding them for a better day."
One of the more interesting sidebars from the downturn is that sales by housing's giant builders have fallen much quicker than the supply of lots. "Public builder sales have shrunk so much that the years supply of owned lots has actually risen from two years to five," says Burns.
