Land Prices Stable After Doubling in 5 Years

DENVER-Land prices in the Denver area, which have doubled in the past three to five years, have finally stabilized, says Libby Kirschner, a land broker at Cushman & Wakefield. Kirschner sells a lot of land to homebuilders, most recently 500 residential lots along the southeast corridor in Castle Pines North and 1,200 lots in the tiny northern corridor towns of Windsor, Dacono and Johnstown.

One of the reasons that land prices are stable is because home sales and starts are decreasing, she says. There will be an estimated 24,000 building permits issued this year in the metro area, which includes both single-family and multifamily, compared with 29,345 in 2000, she says. Last year’s figures were 13% more than 1999.

In the first quarter of this year, there were 6,399 permits issued, down 15% from the 7,558 in the first quarter of 2000, she says.

In 2001, builders increasingly will have to deal with growth limitations, increased development costs from impact fees, and increased raw water costs.

Builders will seek smaller lots and will build more duplexes, triplexes, townhouses and condominiums this year. The average price of a previously owned single-family home in the Denver area is a record $262,000, and builders are looking for ways to build homes priced under $250,000, she says.

Kirschner says the hot area include the northern Interstate 25 corridor, where land is less expensive, and the growth corridor of the E-470 tollroad that links the southeast and east markets to the Denver International Airport.