Cookies on the this website
We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this website. However, if you would like to, you can change your cookie settings at any time.
Continue

New to PropertyWire?

Welcome, and thank you for visiting our website.

PropertyWire is the leading publication for property investors and industry professionals interested in the world of international property investment.

Our aim is to give you intelligent commentary and analysis on the world of retail and commercial real estate.
If you've enjoyed what you've read so far why not sign up for our FREE property alert and online magazine PropertyWire Confidential.

Every week the PropertyWire team sends out a hard-hitting newsletter packed with news and analysis of the top stories plus the best investment opportunities on the market. We always look at the bigger picture like the Euro Crisis, and explain how this will affect YOUR investments.


Ask me later
No thanks

Thu
Apr 24th
Lost Password? Register
Home arrow News arrow North America arrow US developers sell off land on the cheap

US developers sell off land on the cheap

Tuesday, 07 October 2008
US developers selling land cheaply
US developers selling land cheaply

Property developers in the US are starting to sell land cheaply and reap tax benefits from selling at a loss, it has been revealed.

Analysts expect these tax motivated sales to increase as builders try to survive the worst housing crisis in US history.

They are expected to sell off swathes of land in remoter areas and concentrate on smaller developments close to urban areas where property prices are expected to recover first.

Tax law allows companies to apply losses from land and other asset sales to past profits and reap a tax refund. More sales are expected soon because the companies can apply losses only to profits earned as far back as two years and 2006 was the last profitable full year for most builders.

'It's all tax motivated. There's going to be a rash of builders shedding assets,' said Tom Reimers, executive vice president of O'Donnell Atkins, a real-estate advisory firm in Irvine, California.

By dumping land, builders are chasing cash that allows them to keep current with lenders and pay overhead expenses.

D.R. Horton Inc., the largest home builder in the US is unloading land across California at big discounts. Like many developers it bought massive parcels of land in far flung regions and expected to earn big profits as land prices rockets during the housing boom.

But now they can't afford to develop them and need the money from the sale of their assets. Horton has just sold 2,000 house lots in Desert Hot Springs, a blue collar community in the south of the state for $7.8 million, that's under $4,000 a lot. But it paid $110 million for the land.

Horton also recently sold a four-acre parcel in Escondido, near San Diego, for $4.4 million, about 25% of what it paid for the property in 2005, according to the county assessor.

As new-home sales sink to a 17-year low, builders can no longer count on doubling their investments by buying undeveloped parcels, preparing the property and selling the homes on it.

Horton, which built nearly 53,000 homes at the peak of the housing boom in 2006, has posted quarterly losses since the April-June quarter of last year.

This story relates to: america  land  property bubble  property market  tax  [SEE ALL]


BOOKMARK THIS PAGE (What is this?)     Digg!Reddit!Del.icio.us!Google!Live!Facebook!StumbleUpon!Newsvine!Furl!Yahoo!

 
Related News
More Recent News
Earlier News
To see all the latest news articles in our monthly online magazine, Property Wire Confidential, sign up free here






West Tower

West Tower

Car park

home rental guide

West Tower

John Charles

Buy-to-let

North America: Top Headline

US median real estate sales prices up for 24 months in a rowUS median real estate sales prices up for 24 months in a rowThe median sales price of US residential properties increased by 1% in March and are up 10% compared to a year ago, according to the latest figures from housing data specialist RealtyTrac.

Search for Properties:

Feature story

Student accommodation investment check List

It’s the UK’s strongest asset class, but are all student accommodation properties good investments? This is the comprehensive list of what to watch out for when buying student property.

 

Company news

The year ahead: What does 2014 hold for the housing market?

After property growth throughout 2013, much of the same is expected in the coming year, according to a new report from Select Property

Finance Update

Buy to let lifetime tracker products launched

Specialist buy to let mortgage lender, Paragon Mortgages, has launched a range of lifetime tracker products along with refreshing the rest of its range of fixed and tracker buy to let mortgages.

Features

Student accommodation investment check List

It’s the UK’s strongest asset class, but are all student accommodation properties good investments? This is the comprehensive list of what to watch out for when buying student property.

 

Newsletter

Subscribe to our weekly newsletter and stay updated on the property market trends.
Subscribe now >>

Subscribe to our North American property and real estate news feed (RSS)