Looking for the next big thing? Sage Group managing director Mike Miller believes land will be the next acquisition target across Texas. (Get your flags ready--that's the best way to claim it.) He provided us with some info on the state of the sector.
1)Assessments are about to skyrocket: Tax assessors are gearing up to increase assessments at above-average inflationary rates: We could see a 7% bump in Houston. Our average home price increased 9% last year.
2) We need home lots: January 2013s inventory of homes is only 3.7 months, the lowest level since 99. (Back then we weren't building because of the imminent threat of Y2K.) Mike honed in on The Woodlandsat the end of last year, it had 2,750 residential lots remaining. But with over 10,000 new jobs coming to Exxons campus alone, the area is seriously underserved. Bridgeland is another hot area; its land sales increased 31% last year. Look for 9,000 starts this year across Houston, up from nearly 8,000 last year.
3) Expect more rural land sales: Rural land prices increased 3% across Texas in 2011 and initial reports show similar data for 2012. But volumes are tepid, with one-third the number of sales compared to 05. Mike expects this year will see above-average increases in both pricing and transactions.
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