Colliers International’s Second Half 2015 Land Research and Forecast report shows the pace of land sales accelerated through the end of last year, with double-digit gains recorded across proposed land uses.
From the first half of 2015 to the second half of the year, sales of land parcels rose by 12 percent for residential construction, 36 percent for commercial uses and 25 percent for industrial uses.
“We anticipate the rise in land transaction activity shown in the second half of 2015 should carry over into 2016, as the local residential and commercial markets continue to improve,” said Pete O’Neil, research director for Colliers in Greater Phoenix. “The primary driver of land sales will be the housing market, with single-family permitting likely to see an increase of more than 40 percent in 2016.”
Report highlights are outlined below.
- Housing prices are generally trending higher, and the total number of homes sold in 2015 outpaced 2014 levels. New home sales surged, particularly in the second half of the year, although prices generally remained flat.
- Single-family permitting was fairly consistent throughout 2015, but was considerably higher than 2014, with permits surging approximately 45 percent year-over-year.
- Although multifamily permitting for all of 2015 dropped 28 percent from 2015, permitting in the second half of 2015 topped levels recorded in both the first half of 2015, as well as second half of 2014.
- Pricing trends began to change direction in the second half of the year as demand and activity accelerated. The median price for all land sales rose 14 percent from the first half, reaching $2.71 per square foot in the second half of 2015.
- The median price in land parcels for residential was $2.09 per square from, down from $2.99 per square foot in 2014.
- The median price for commercial land in the second half of the year was $4.75 per square foot, 40 percent higher than the median price in the first half.
- The median price in land for industrial development fell 13 percent in 2015, reaching $2.18 per square foot.