With financing issues putting a crimp in many builders' plans to acquire new lots, Big Builder Online recently surveyed readers about their interest on land acquisition and land banking. The majority of respondents are in the market for new lots. Almost half of the respondents--47.4%--said they are out looking for deals to acquire new lots but don't need to buy immediately, while 36.8% said they are in dire need of new lots. The remaining 15.8% of respondents said they are looking to get rid of some of their lots.
But many respondents haven't had much luck in closing land deals in the past six months: 42.1% said they have not been successful at all, while 31.6% said they have only occasionally been successful. One respondent attributed it to a lack of financing, while another said: "Big builders with cash are getting all the good properties." Still a small number of respondents--26.3%--said they have been very successful or mostly successful in closing their deals.
Response was mixed on finding financing to meet lot needs. Almost half of the respondents--47.4%--said they haven't been able to find adequate financing, while 36.8% said finding financing hasn't been a problem and 15.8% said they don't need to finance land deals.
When it comes to land banking, 21.1% of respondents said they completed at least one land banking deal in the past six months, 42.1% said they are considering it down the road, and 36.8% said they had no interest in land banking.
However, the majority of respondents--52.6%--said they believe more public and private builders will be looking toward land banking in this current environment. Only 15.8% of respondents didn't think the current environment would spur land banking, and the remaining 31.6% of respondents were still on the fence on the subject.