As the real estate market recovers and the inventory of desirable available lots evaporates, there’s renewed interest in land acquisition from builders, developers and brokers. In the post-crash real estate environment, the need for quality land remains paramount, but the strategies and methods for attaining land have changed. Today’s land acquisition process is considerably more complex as a result of more stringent municipal development requirements, evolving consumer demands focused on lifestyle and constrained financial and staff resources from the builders themselves.
Making the right land choices is more critical than ever while simultaneously more difficult than ever. Amidst all these challenges are new technologies and opportunities that are key to not only keeping up but getting ahead in land. This all begs the question-given the new “normal” what does it take to succeed in land acquisition today?
How and Why Land Acquisition has Changed
There are three main drivers that have morphed land acquisition in recent years: municipal development requirements, consumer demand and builder constraints.
Many municipalities were burned by haphazard development of the recent past and they have a strong desire for sustainable communities exhibiting new urbanism and new suburbanism traits. Similarly, there have been changes in consumer preferences including the shift to lifestyle-based purchase decisions, rising price sensitivity, and increasing interest in public transit proximity. Further, builders and developers have impacted the land acquisition success equation with margin pressure, stringent profit requirements, and resource constraints.
Market Analysis is more Important than Ever
With an increasingly complex land acquisition process and more numerous requirements from consumers and municipalities, market intelligence and land analytics are now required for land acquisition success. Some of the key market metrics to track and know are: median price, absorption rate, and price/sqft. You also need to consider alternative markets in your analysis such as resales and foreclosures and it’s always best to take all analysis to a sub-market level to identify, understand and exploit unique hyperlocal market factors.
Good Technology and Data Lay the Foundation for Success
Both technology and data are key pieces to the new land acquisition equation. For one, data enhances land decisions and there’s a plethora of proprietary, third-party, and publicly available data to use in your market and land analyses. Taking it one step further, in this era of doing more with less, and seemingly overwhelming amounts of data and decision variables, technology is a critical enabler to rapid, sound land strategies. Mapping systems are rapidly becoming requisite tools for builders and developers as they provide an intuitive means to combine many disparate data sets and quickly identify trends and patterns in data.
With all the upheaval in land acquisition, the new formula for success clearly hinges on possessing quality data, robust mapping technology, and resources capable of performing local level market analysis.
To learn more about land acquisition best practices and the latest in real estate mapping technology visit the links below:
