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Kelley’s Market Trends: Vacant Land Foreclosures

The highpoint of land foreclosure sales was in 2012

By Jim Kelley

Little attention has been paid to land foreclosures because they have not had the same overall effect on the real estate market that residential foreclosures have had in recent years. This chart illustrates the last six years of vacant land foreclosure sales. The highpoint of land foreclosure sales was in 2012, which is a year later than it was with residential foreclosure properties. The primary reason is that the land market was hit substantially harder by the recession than the residential market and the lenders that foreclosed on vacant land had them listed at prices that were far above what the market would bear.

The residential foreclosure sales had overall marketing times of around 12 months in 2010, 11 months in 2011 and nine months in 2012 as the residential market stabilized and started to improve. Vacant land foreclosure sales had overall marketing times of seven months in 2010, 12 months in 2011, then 20 months in 2012.

By 2012 the lenders’ inventory of unsold vacant land had built up to a point that prices were cut and they started to sell again. At that same time the residential market was starting to improve and the number of new housing starts were increasing for the first time since 2004.

The number of new bank-owned land listings was 156 in 2009, then an additional 262 in 2011 and dropped to 144 in 2012 as the prices were dropped and they started to sell.   So far in 2015 there have only been 17 new bank-owned land listing placed on the market in Flathead County. Of those, there are 11 that are currently on the market.

In 1981, Jim started Kelley Appraisal in Kalispell and has since built an extensive data base of economic and real estate-related data on northwestern Montana. Over the last several years, he has published annual reports on the Flathead Real Estate Market and been a guest speaker on numerous occasions for various groups in the Flathead.