REAL ESTATE O: With new construction prices so high, is vacant land selling? Dick Phelps A: New construction costs have risen recently due to the increase in materials. Speaking with the owner of a building materials company, I was told prices have risen on average 20-25% with some items even as much as 50% (if you can get them). With this rise in new construction cost, one would surmise that the purchase of vacant land would be down. The high cost of new construction has affected vacant land sales negatively but I am surprised in the number of vacant land sales. I asked a couple buyers the reason for the purchase and their reply was interesting. They felt that we are positioned for a large increase in inflation. We all agreed that we don't have a crystal ball so that mindset is questionable. But being that, they felt that if so, they wanted to have tangible assets as a hedge on inflation. Having your money in "money" was not the position to be in if inflation jumped. Also, with the continuing low interest rates, they felt comfortable borrowing the money if needed. This reasoning helped me understand the continued sale of vacant land through this period of high construction costs. If you are looking for a tangible asset, land is a good option. Contact your Realtor or me and find out what is available. Centur For Questions Contact: Dick Phelps 218-766-5263 e rphelps@century21dickinson.com DICKINSON REALTORS REAL ESTATE O: With new construction prices so high, is vacant land selling? Dick Phelps A: New construction costs have risen recently due to the increase in materials. Speaking with the owner of a building materials company, I was told prices have risen on average 20-25% with some items even as much as 50% (if you can get them). With this rise in new construction cost, one would surmise that the purchase of vacant land would be down. The high cost of new construction has affected vacant land sales negatively but I am surprised in the number of vacant land sales. I asked a couple buyers the reason for the purchase and their reply was interesting. They felt that we are positioned for a large increase in inflation. We all agreed that we don't have a crystal ball so that mindset is questionable. But being that, they felt that if so, they wanted to have tangible assets as a hedge on inflation. Having your money in "money" was not the position to be in if inflation jumped. Also, with the continuing low interest rates, they felt comfortable borrowing the money if needed. This reasoning helped me understand the continued sale of vacant land through this period of high construction costs. If you are looking for a tangible asset, land is a good option. Contact your Realtor or me and find out what is available. Centur For Questions Contact: Dick Phelps 218-766-5263 e rphelps@century21dickinson.com DICKINSON REALTORS