Land demand trending toward infill, multifamily

An anticipated cooling of the housing market and a trend toward homebuilders seeking to minimize risk may result in fewer land deals in 2019, say two land brokers in contrasting markets.

Randy Thibaut, president and CEO of Fort Myers-based Land Solutions, says higher land costs and increasing government-imposed impact fees are encouraging homebuilders to seek higher-density opportunities on smaller urban parcels. Similarly, Tampa-based Eshenbaugh Land Co. founder and President Bill Eshenbaugh sees a pullback in larger master-planned developments and a pushback by builders who want to pay less — and pay later — for entitled land and finished lots.

“I think the homebuilders as a group are in a pause mode right now,” says Eshenbaugh. “It started in July with the increase in interest rates, so there is a little bit of a reset happening. There are some builders who sell into higher price points finding buyers are really stepping back from the table. We had some land deals in the embryonic stage in November and December pushed back into January and beyond while builders wait to see how the year is going.”