By Angela Gonzales | Phoenix Business Journal
Homebuilders are out scouting for land to build more homes in an undersupplied market, but very few deals are getting done.
“They all went on strike last year,” said Greg Vogel, CEO of Land Advisors Organization. “They ended up terminating or postponing almost all their purchases.”
But they’re making progress, buying more lots in March than they did during the first two months of 2023, said Jim Daniel, president of R.L. Brown Housing Reports.
“Homebuilders spent close to $134 million in the Phoenix market, acquiring over 2,000 new lots in March, and that is good news,” he said. That’s up from 1,243 lots purchased in March 2022 for $108.9 million.
Separately, homebuilders paid $178 million for more than 4,600 acres in March, he said, down from $396 million for 9,349 acres in March 2022.
It’s been nearly a year since homebuilders paused lot acquisitions throughout the Valley, except for a few recent transactions, including Toll Brothers Inc., which paid $24.7 million for 100 acres at Storyrock in north Scottsdale and Shea Homes, which paid $12.83 million for 107.78 acres of vacant land near 75th and Northern avenues in Glendale, according to Tempe-based Vizzda LLC data research firm.
Other homebuilders are slowly entering the land acquisition market, said Steven Hensley, advisory manager for Zonda housing research firm.
“Stronger than expected sales activity in the first quarter has spurred a sense of optimism among homebuilders,” he said. “There is more clarity regarded absorption levels, which is making it a little bit easier to underwrite new land positions.”
Vogel said builders have been eating through their existing backlog over the past year, which means they’re out hungry for more land.
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