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Homebuilders scrambling to buy land for new residential communities drove land prices higher in Southwest Florida as the recovery took hold.
But Keith Bass, the president and CEO of Bonita Springs-based developer and homebuilder WCI Communities, says land-price appreciation has cooled.
In a transcript of a WCI call with investors on Nov. 4 posted on SeekingAlpha.com, Bass says builders aren't assuming significant home-price appreciation like they were in previous years, so that has stabilized land prices.
“I certainly think the land market has cooled a little bit over the last three quarters, where guys were really struggling a year or so ago to get their community count up,” Bass says. “But [there's] a lot more rationalization in the market, quite frankly, which I think is very helpful.”
Bass says sellers aren't expecting significant appreciation, either. “I think they were afraid a year ago, afraid to pull the trigger on a land deal thinking maybe if the price would go up 10% next month, and that's not happening.”
Meanwhile, WCI is still in the market for land on which to develop new residential communities. “We've got tremendous deal flow, so there is certainly not a shortage of things that we're going to be able to put under contract and move forward. So we feel good about the land market,” Bass says.
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