I have been asked in recent months about the market for building lots in Westchester County. While I am far from a high transaction land guy, I'll tell you what I do would if I had a double lot, an adjacent building lot to my home, a spot lot nearby, or a small parcel that could be developed with a house or two.
I'd keep it.
That's what I'd do. I'd hold on to it until more development made values higher. It doesn't make me money as a broker to advise people not to sell, but if you don't need to sell your land, why you let it go when the market has gone so low?
If you have a small lot that a spot builder could build a spec house on, the market value of that land is far lower than it was a few years ago when they were gobbling up every available parcel. No one is gobbling anything right now except in a few choice, exceptional areas.
Here's the method to my madness: If you are paying taxes of $500 a year on a vacant lot that you might only get $150,000 for, why wouldn't you hold on for when the market recovers and you can command a better, higher price when builders come back to the table? Land doesn't have the same appreciation curve as homes, and the fact that we can't just go make more of it gives it a specific scarcity that plays to the advantage of those that have the land once the recovery is more sustained.
Even if you held on for another 5 years, that is only $2500 in carrying costs for a price that could be 10, 25 or even 50 thousand higher than what you might get today. What instrument exists where you can pay $500 in annually and make 5 figures in 5 years? Am I being overly speculative? I think not, I see people pay $2500 for minor improvements to make a home ready for sale with no guarantees. Land doesn't have tenant headaches, you don't have to fix leaky toilets, plow driveways, or put up with loud music. You simply pay the taxes until the market improves. In the scheme of things, it is incredibly low risk if you don't need to sell. If you need to sell, then you have to take what comes, naturally, but if you don't have to, you are in the driver's seat. As Will Rogers said, God isn't making any more of it, certainly not in Westchester.