“After the Marshall Fire, what is my lot worth?”

Dave Janis here and I wanted to get a message out. After the Marshall fires, I’ve been hearing a lot of people asking “What is my lot worth?” Families are doing calculations after talking with their insurance company and builders and wondering, “does it make sense to rebuild, or should we buy a house and sell our lot?   

As a builder, developer and real estate agent, I have a pretty good idea. Most builders/developers pay between 20%-25% of the end value of a house for a lot, however there are a lot of variables to consider.  To start, a higher priced house ($3,000,000 - $5,000,000) will be close to 20%-30% of the end price.   A $500,000 - $600,000 house will be closer to the bottom, at about 15% due to the fact that you do not have as much wiggle room, not as much profit. 

Another variable is the level of demand in these neighborhoods. For example, a completed house that is surrounded by other houses under construction or vacant lots that are fire damaged.  How much demand will there be for a family wanting to move there versus another neighborhood? 

Another thing we are looking at is building cost. For example, in Louisville all the homes have to be net zero, which on the construction side adds another $100,000 flat. This means the higher the cost of construction, the less you can pay for land.  Homeowners have seen their housing prices go up and are thinking that their lot values are going up as well.  Technically they are, however, the cost of construction has gone up 20% in the last year, which takes a lot of the land value away. Once you add everything up, there is only so much you can pay without losing money on it. 

Honestly, I could talk about this for hours. If you have any questions or want to chat, call me at 303-442-5001. 

Over the next couple weeks, I’m going to be doing videos on specific neighborhoods including Sagamore, Spanish Hills, and up by Harper Lake to give you an idea of what the redeployment is going to look like in each of these neighborhoods.

Have a great weekend and thanks for your time. 

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