One sure sign of home builder confidence in recent months has been their willingness to re-enter the land-buying game.

The sheer number of vacant finished lots and partially completed homes in previously hot housing markets—for example, more than 50,000 lots in the East Valley near Phoenix; more than 45,300 lots in greater Orlando; and more than 15,000 unsold homes and lots in San Diego County—is creating opportunities for builders that are running short of lots to pick up home sites for bargain prices either to build on then immediately or, on some cases, to hoard and sell to other builders when yields might be better.

Just how aggressively builders are jumping back into lot acquisition is still hard to gauge because they generally don’t like to talk about their land strategies. Jon Todd, Shea Homes’ mergers and acquisitions manager, is typically reticent when asked about his company’s current land position or purchasing. He is more forthcoming, though, about what public builders are doing in Southern California. “I’m seeing a lot of activity among those builders that are running low on land,” he observes. Whether they are getting good deals, though, depends on the market. “There’s still a lot of disruption out there.”

In July, Shea sold the 77 home sites in its Pradera at Elm Park community in Rialto, Calif., outside of Los Angeles to D.R. Horton, a builder that several of its competitors say is especially active on the West Coast buying finished lots. Horton, though, is hardly alone. The Arizona Republic this week reported that several builders—including Richmond American, Lennar, K. Hovnanian, and Meritage Homes—have taken over developments of subdivisions in the Phoenix area that were abandoned by other builders as the recession worsened. The newspaper quoted Meritage’s CFO, Larry Seay, who notes that lots that once sold for $80,000 per acre are going for $30,000.

Builders seeking land deals will find themselves bidding, with greater frequently, against investors. The North County Times reported recently that investors, enticed by rock-bottom pricing, are scooping up as many as 100 acres at a clip in California's San Diego and Riverside counties. The newspaper points to one tract with 100 lots in Temecula that sold in 2005 for $23.5 million and was resold this summer for $3.5 million.

In Las Vegas, some finished lots have been selling for as little as $10,000, Dennis Smith, president of Home Builders Research, told the Las Vegas Sun last week, with the majority of recent land sales ranging from $20,000 to $35,000.

That’s the price range Ashton Woods Homes has been seeking in the Tampa-Orlando, Fla., markets. The Georgia-based builder last month acquired 34 home sites at Citrus Park Place in Tampa, where it will start building homes in November that start at $179,900 and go up to $259,900. Most of the lots there are 50-by-120 feet, but a handful are wider and some are as deep as 150 feet, says Michael Roche, Ashton Woods’ vice president of sales and marketing in this market. “The good thing about this deal is that there’s a variety [of lot sizes],” he says.

Roche says that one of the reasons his company believes it can make money again building homes is because “lot prices have finally come down in market value. Landlords had been sticking to their guns on stuff we had been looking at for two years up until about 90 days ago, when they contacted us because their phones haven’t been ringing.”

In Orlando, Ashton Woods has one development under contract and two others in negotiations. In Tampa, it is “close" on two other deals, according to Roche. He also notes that Ashton Woods is becoming more aggressive about buying finished lots in other markets and states. “We’re doing about 1,200 units a year right now, and the goal is to be doing 5,000 units [annually] in three years. That’s going to require buying more land and expanding into new markets.”

With so many finished lots available, Florida is likely to be a hotbed of land acquisition activity for the foreseeable future. Last Friday, for example, Naples-based London Bay Homes reached a tentative agreement to acquire 50 single-family and villa home sites from the financially troubled developer Bonita Bay Group at its Mediterra master-planned community.

Mark Wilson, London Bay’s president, would not disclose the selling price of those lots, although he did concede that price was a factor in the timing of this deal. “We’re in the fortunate position because we have capital,” he tells BUILDER.

London Bay has had a long relationship with Bonita Bay Group, and has the biggest presence among builders at Mediterra, where its products range in price from $1.3 million to $3 million. Wilson says that a key factor that made this deal more palatable was working out a way for the residents to own Mediterra’s country club and golf course. “Bonita Bay has been trying to turn over all of its clubs to its owners, and from our standpoint we believe it’s a positive” that the owners control the amenities.

Longer term, London Bay Homes is looking to buy more finished lots, not only to build on them but also to “tie up” land for four or five years and them sell them to other builder/developers when the timing the potential profitability are more opportune. He refers to these as “entrepreneurial acquisitions.”

Wilson doesn’t seem overly concerned about whether his company is jumping too soon into the market when lot values might still go down in price. “I’m not looking for the perfect week, and it’s impossible to get perfect timing,” he says. “But for certain assets, there is an opportunity in the current time period that, 12 months from now, you’ll say was the right move.”

John Caulfield is senior editor for BUILDER magazine.

Learn more about markets featured in this article: Riverside, CA, Orlando, FL, Tampa, FL, Los Angeles, CA, Phoenix, AZ, Naples, FL.