Lotsa Lots?

The news on available lots in the greater Des Moines metro area hasn’t exactly been stellar for the past few years. Simply put, the land just hasn’t been available. Farmers and other owners have been holding on to ground. And, yes, developers and builders have had their hands tied a bit.

Slowly but surely, there’s hope on the horizon, say some development experts who deal with this issue daily. “Good effort is being made to bring more lots into play,” says Bill Spencer of Landmark Development Services. “Over the past two years, we have seen quite a few properties open up. The mix of lots in terms of quality, type, and location is most important, and efforts have paid off to do just that. The variety of lot sizes and various price points is critical, and we’re finally starting to see that.”

Spencer says he would be concerned if all lots were just the same. “The mix and variety is very important.”

The causes

What brought about the situation of fewer lots in the first place? “The recession hit at a time when there were many lots on the market,” Spencer explains. “With cutbacks in building and buying, all those lots had to be sold first. Normally, developers would have continued purchasing land for future use, and there would have been an available pool of lots. That couldn’t happen in a recession. So when those lots were sold, there weren’t backup lots waiting to be developed. Therefore, we had a huge shortage.”

Eric Grubb, owner of Solid Ground and a partner with Jeff Stanbrough in Newblood Development, agrees that the recession did no favors for builders and developers. “There was an oversupply of lots, and then everything flip-flopped. Plus, keep in mind that even when there is land available, it takes about a full year to get through the regulations and procedures of various city governments before lots can go on the market. During the downtime, the pipeline for lots just never refreshed. The slowdown has just taken time to work through, but it is slowly on the upswing, in my opinion.”

“The situation has been an age-old problem,” says Bill Kimberley of Kimberley Development. “The price per acre for development has been the key for farmers. Farmers can’t make it on the current price per bushel, but many aren’t willing to give up their land. When they do sell, it increases the prices of the lots. It’s a never-ending cycle.”

Hot spots

Where are the hot spots for building? Kimberley says the western suburbs continue to have strong appeal for developers, builders, and homeowners. “Waukee specifically is so strong right now. I personally have bought 100 acres there. West Des Moines and Urbandale also continue to be strong.”

He also continues to be high on Ankeny, where much of his building and development business has been centered since 1978. “Ankeny still has lots and lots of room to grow. It has quadrupled in population since I started my business. It has the infrastructure in place to keep on growing, that’s for sure.”

Jeff Saddoris, vice president of brokerage services for Knapp Properties, says the company has developed three subdivisions in the past year and a half in Waukee, Polk City, and Urbandale. “Developments we have finished have sold out quickly, and certainly more are being planned.”

Good schools

One major key for development, besides available land, is the importance of good schools, Saddoris says. “That is vital. It’s why places such as Waukee and Ankeny continue to be so strong. And, while it’s under the radar a bit, the same is true of Polk City.”

There truly is strong momentum right now, he says. “We used to say that an entry-level house was in the $200,000 range. Now that has risen to $250,000. Those numbers are hard for some potential home buyers to deal with. So that situation puts the townhome market strongly into play. Builders understand the market and react accordingly.”

For example, he says that might mean having to slightly narrower lots to cut down the costs of buying a lot and building a home. “With all the added costs for permits and fees, that’s important.”

Besides the other western suburbs that remain as home-buyer magnets, Spencer is banking on Adel, even farther west. “That community has just extended its 7-year, 100 percent tax abatement to the year 2025.”

Grubb, who also sees growth in Clive and Grimes, agrees. “For so many years, there was little interest in the Adel area for building. But now there is significant activity, especially with its amazing tax abatement and its extension of sewer lines. It has become an area to watch.”

“That sends such a strong message to developers and builders that Adel intends to continue to grow,” Spencer concludes.