Hi Prospects & Friends,
I wanted to discuss a subdivision I came across that has the term revitalization occurring in it. First revitalization means old becoming new as well as impacting a new beginning/development for the future. Revitalization subdivisions don't occur everywhere, and when you find them they can add the development of real estate wealth to your portfolio. Listed below are 2 homes in the same subdivision, but 1 is old and 1 is new, as to where the supply and demand has caused this subdivision to do advanced revitalization's. Stats are explained below:
House 1 (grayish house) is pending for $375,000 and is expected to close March 18, 2010
House 2 (brown house) sold for $1,150,000 October 26, 2009
So let me explain the stats below:
House 1 (grayish house)- Gross Sq.ft. 1,142
Year Built- 1943
Lot Size- 6,000
House 2 (brown house)- Gross Sq.ft. 4,100
Year Built 2009 sq.ft.
Lot Size- 6,000 sq.ft.
Lot sale- 5,000 sq.ft. sold November 4, 2009 for $355,000 ($71/sq.ft.)
So to better understand the revitalization going on in this particular subdivision, I can conclude any home with a lot size of at least 5,000 sq.ft. will allow one to develop a brand new home equating to at least $1,150,000. So this means if you have an older home, its the lot the house is sitting on that will gain you the most wealth in this subdivision, because of the revitalization occurring. The demand for the lots in this subdivision for new homes will continue to cause the supply for the older homes to continue to be in demand which will continue to cause significant returns for the owners with the older homes. I was curious and ran this subdivision in the tax records and found 742 owners, I noticed a bigger lot on the tax roll had lot value at $792,884 and the improvement value was only at $4,379 totaling $797,363 for tax year 2009. The owner is actually still homesteading the home per the tax records and was built in 1943. So out of the 742 owners in this subdivision only 264 of these owners have older homes, all the others have newer homes. So yes all the owners sitting on older homes are quite wealthy right now because of the revitalization occurring in this subdivision. I can conclude from the revitalization stats that if I see a home hit the market like House 1 grab it, because I don't think many are realizing the house is listed for $375,000, but the lots are going for $71/sq.ft. So the average person would say why would I pay $375,000 for a home that is built in 1943 and has only 1,142 sq.ft. of space, when they could get a bigger home for same price? Well the trick is reverse all that thinking and realize the lot for this house alone is worth $426,000 without the home on it, and will continue to go up in lot price because of the demand for it for newer homes (revitalization). There are not many subdivisions doing revitalization so finding them is a wealthy jewel, because all you have to do is wait for someone to put an older home on the market that has been fixed up that is less than what the lot values are going for and reap the benefits once you sell. Many of these owners with the older homes in this subdivision don't realize the revitalization occurring, because House 1 has been totally fixed up and is pending for $355,000, this house has a lot currently worth $426,000 since a 6,000 sq.ft. lot recently sold for $71/sq.ft. back in November 2009. I'm watching this subdivision as of now, because of the advanced revitalization occurring rapidly.