In the middle of this prolonged virus crisis, people with investment portfolios may wish they had pulled money out of stocks and invested in real estate, specifically in land. During the past 18 months, there have been 388 sales of land parcels in the Santa Fe area. Bouncing off a recent national article titled “Why Land is the Perfect Safe Haven for Capital During a Crisis,” Home interviewed a small handful of local Realtors about this subject.
Debra Hagey, Santa Fe Properties, has a specialty in land listings, from Galisteo Basin to Abiquiu.
We saw a lot of land go down in price during the economic downturn starting in 2008. I am seeing a little more activity in land. It’s still a hard sell, because people don’t realize how much it costs to build.
So many people decide it’s better to buy a house that’s already built and has landscaping. The problem is that there’s not much inventory, so that can motivate people to consider building.
Does land represent a save haven for investors today?
I will say that land is a great deal right now. People who purchased around 2004 to 2006 paid perhaps $300,000 for lots that are now selling for $180,000. I’ve sold lots in Las Campanas for $60,000 that were purchased for close to $300,000.
So if you have cash, buy a lot. I can’t say it will go up in value quickly, but I just can’t imagine lots going a whole lot lower than they are right now.
What about this idea that if people in the big cities work on the internet, they can escape to a more rural area and do their work wherever they are?
But internet access is still a challenge in remote areas, even in Glorieta. Typically our demographics are older people who have the opportunity to move out of the city and come to a smaller home, a nicer environment with good air quality and open space, but finding something more recent than a house built in the early 2000s is tough.
People come from other places wanting 10 acres or more and wanting city water, sewer, and gas, and I’m like, “I don’t think that’s going to happen.”
And what if you’re an investor thinking about doing a housing development?
You’d better have deep pockets. I sold 250 acres to an investor for $1 million, let’s say, and it’s cost him almost that amount to just get the planning and work with county and whatnot, so now he’s got $2 million in it. Those lots will be expensive when he finally gets to it, if he ever does.
David Dougherty, Dougherty Real Estate Co. said, I think buying land in this situation is a good idea.
How has the land market changed in the years you’ve been in this business?
It used to be that you could buy a piece of land and subdivide it, drill a well or two, and start selling away. It is hugely more complicated now because the county gets involved with access, there are requirements for topography, and on and on. Only…