Is Land For Housing Becoming Scarce?

land for housing
There is an increased demand for home building but a lack of available land.

As has been well chronicled over the past few years, the lack of inventory of homes for sale has provided significant headwinds for home buyers in recent history. In addition to limiting the options of homes for these buyers, it has also led to persistently high and rising prices. Needless to say, a lot of emphasis has been placed on the ability of home builders to construct new homes to meet the growing demands and alleviate the inventory constraints.

The land challenge

In addition to high material costs, persistent supply-chain issues, and a labor shortage, there are some other factors at play in the home building sector. Land suitable for housing is becoming increasingly scarce in the United States due to land-use restrictions and a dearth of public infrastructure investment. Add in skyrocketing prices for land and you have a formula for gridlock.

Did you know? According to, the average price of vacant land per acre in the Sunbelt more than doubled in the past two years through the second quarter of 2022. This is resulting in few investors bidding on land for new construction projects. In fact, current homeowners are also being impacted by rising land values. Ten years ago, land value contributed to an average 38% of a property’s value. Today, land contributes to 47% of a property’s value.


The bottleneck in new home construction and persistent inventory constraints are expected to persist in the foreseeable future. As a result, most economists believe that municipalities need to ease zoning rules and other constraints to reduce land inflation. This would result in more housing being built to address the inventory challenges. Of course, many existing homeowners may not welcome this approach as typically this results in more supply and thus lower home prices.

In a market such as South Florida, we will continue to see insatiable demand for housing. This includes both homes for purchase and for lease. Are you looking to buy, sell, or rent housing in South Florida? We can help! Contact one of our team members at Live South Florida Realty, Inc. today! Also, don’t forget to download the Florida Home Search app for your mobile device as well.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.