I thought I'd take a look at Hamptons land sales over the past decade, given the big prices paid over the past couple of years and fawned over by Curbed in great detail. Conventional wisdom says that land prices have jumped in recent years. That's sort of accurate.
I presented the market share of land sales (magenta line) in relationship to condo/single family sales as well as median price per acre (blue columns) and maximum price paid per acre (orange line) during each quarter and saw a slightly different story.
While overall median land price per acre has generally stayed in the $500k to $750k range since the financial crisis began, I thought that would be a bit boring to focus on. Instead I presented the market share of land sales and the maximum price paid per acre each quarter. Both have moved higher and are largely in sync. The market share of land sales has been volatile, spiking (and peaking) to 9.4% in 2011. The increase in market share of land sales correlates with the trend of highest price land sale per acre during each quarter. The contrast rare waterfront sites commanding record prices yet overall land sales seem remarkably commonplace and modestly priced. Land sales seem to be a market of outliers that are getting most of the attention.
Luxury real estate as a category has been strong in recent years and setting records. The higher the most expensive parcel is sold for during each quarter, overall market share seems to be moving along with it. Big land sale = more modest land sales relative to all property sales.
One could say that high end land sales are priming the overall market pump. I could even go so far as saying the pattern of top sales each quarter creating larger land sale market share is proving to be the best land sale marketing technique ever devised.
Let's call this phenomena land sale churn.
· Matrix [MillerSamuel]