Top 5 States in the USA
Where Land Foreclosure Action Is Robust
May 14, 2007
A successful real estate investor of the 1950s, Louis Glickman, was asked by the
New York Post to shed some light on his business strategy. He simply answered,
“The best investment on earth is earth.”
Raw land in the USA has proven time and time again to be a stellar investment.
Las Vegas, Nevada was once a barren desert landscape that did not even have a
reliable source of drinking water. Today it is the most famous watering hole on
the continent, and home to some of the most valuable property. Miami Beach used
to be a mangrove swamp, until someone built a wooden bridge to the mainland and
ushered in one of the biggest land booms in American history.
An investment in land requires minimal maintenance with potential for great
gains, and you can also buy land for a substantial discount compared to many
other types of real estate. If you factor in the added savings and deeper price
cuts that foreclosed land offers, the ability to buy low and sell high for a
substantial profit is often exponentially increased.
The most recent data on foreclosure activities, compiled at the end of the first
quarter of this year, shows that in March of 2007 the highest volume of
foreclosure activity involving parcels of land was in California, Georgia,
Arizona, Ohio, and Colorado.
#1 California
California topped the list with nearly 300 pieces of land in some phase of
foreclosure. Overall, foreclosure activity in California involved a whopping
32,000 or more pieces of real estate, but most of those involved single family
homes.
Although 300 land listings is a large number, based on the overall inventory of
various foreclosure properties it accounted for less than 1 percent of the
total foreclosure inventory, a total that is not particularly significant.
#2 Georgia
It came in second place, but statistically speaking Georgia actually beat
California. On the surface, Georgia and California appear to have similar
numbers in terms of their land foreclosure listings, and both have around
275-300 land foreclosures that showed activity in March. But when you consider
that Georgia is a much smaller state and its grand total inventory of
foreclosures amounts to a drop in the bucket compared to the volume of
foreclosure listings that California boasts, Georgia appears to be the hottest
region for discounted land sales.
With less than 4,500 total foreclosures – compared to California’s 32,000 –
Georgia’s famous red clay soil accounted for more than 6 percent of the state’s
foreclosure activity. That is the biggest percentage recorded by any state in
the entire USA and is about 250 percent more than the national average.
#3 Arizona
Arizona had more than 200 instances of land foreclosure activity, which was
about 4 percent of the entire picture for the popular western state. Although
the state has lots of room to continue its rapid growth and development, many
land speculators predict that the popularity of the state will continue to feed
the real estate fever, making Arizona land a good long term investment.
#4 Ohio
During the past two years Ohio has been one of the top ranked states in the
country for foreclosure inventories, and while the total number of foreclosures
in March hovered around 4,500, more than 150 of the properties showing
foreclosure activity were pieces of land. Some are in urban areas, others in
the countryside, and while most of the foreclosure sales continue to involve
homes, many consumers and investors will find it more sensible to buy land and
then build to suit themselves.
#5 Colorado
Colorado had more than 11,000 properties with foreclosure activity in March,
and just shy of one percent of those foreclosures are land listings, which
number about 100. The “cowboy” states that include Colorado are famous for
their expansive ranches and wide open spaces, but it is interesting to note
that of all the states in the USA, Oklahoma and Texas were the states where raw
land made up the smallest percentage of overall foreclosure activity. So if
you’re planning to buy your own dude ranch, you might prefer to shop in the
Rocky Mountain State of Colorado.
Because the value of land is determined in ways that differ considerably from
the ways that homes are appraised, there are special considerations to keep in
mind when buying a plot of land. Desirable characteristics that may be less
obvious include such things as having municipal water and electrical hook ups
in place or at least nearby. Road access is especially important in rural
areas, and if land is located near water it is important for insurance purposes
that it is not in a flood plain. Because evaluating the land is one of the most
critical steps, even experienced investors take professional help from experts
such as land surveyors and land appraisers.
While it is generally true that the more amenities within a reasonable
proximity, the better, there are significant exceptions. Thanks to technology
that allows us to work from virtually anywhere, many Americans are migrating
away from crowded urban areas into rural settings where they can be closer to
nature and enjoy the peace and quiet of life in the countryside. They aren’t
making any more land, so those who buy it now may own some rare and priceless
ecological treasures in the near future.