Overcoming Lot Supply Shortages with TraceAir’s Competitive Advantage

Land acquisition teams across the country are in desperate search of lots to build on. The first quarter of the year has seen a significant tightening of home lot supply across the nation, as revealed by Zonda’s New Home Lot Supply Index (LSI). The LSI, which serves as a critical barometer for residential real estate dynamics, came in at 57.4 for the first quarter. This marks a 1.5% decrease from the same quarter in 2023 and a 7.3% decline from the prior quarter. The national housing market has been significantly undersupplied since 2017, and this trend continues as lot availability diminishes.

The Challenges Facing Builders

In the report, Ali Wolf, Chief Economist at Zonda, highlights the difficulties builders face: “Limited availability of desirable land near major job centers is pushing new housing developments further into the suburbs. However, these outlying areas often lack the necessary infrastructure, creating a bottleneck for builders eager to expand their communities. This imbalance between available lots and the desire to start new construction persists, posing a challenge for the housing market.”

Reflecting the increase in construction activity over the last few quarters, lot supply has tightened in most major metropolitan areas. From the fourth quarter of 2023 to the first quarter, 19 out of 30 metros experienced a year-over-year tightening. Los Angeles-Orange County, Miami, and San Diego are among the tightest markets due to geographic and topographical limitations, while Indianapolis, San Diego, and Charlotte saw the largest increase of land supply year-over-year.

How TraceAir Provides A Competitive Advantage‍

TraceAir’s cutting-edge solutions, purpose-built for homebuilders and land developers, offer a significant competitive edge by enhancing efficiency, accuracy, and decision-making from land acquisition through final sale. The tools within TraceAir enable homebuilders, investors, and land acquisition teams to analyze raw land and finished lots faster and with greater confidence. As the market continues to tighten, technology implementation becomes crucial for builders aiming to remain competitive and seize every available opportunity.

Key Benefits:

Fast, Accurate Land Analysis: Understanding topography and cut/fill requirements is critical during land acquisition. TraceAir delivers data within 24 hours of a scan, accurate to 1/10' (3 cm). This precision is essential for making informed decisions during the acquisition process.

Finished Lot Verification: Ensuring every lot is on grade is vital for builders purchasing finished lots. TraceAir’s Lot Viewer tool is a game-changer, breaking down projects into individual lots and calculating cut/fill balance and elevations with a single click. No other tool provides such precise and comprehensive verification as quickly and easily as Lot Viewer.

We use Lot Viewer on every project. It has been a game-changing tool for helping us quickly assess our lots and track progress.”

— Ritchie Tan, P.E., Land Acquisitioner, D.R. Horton

Ability to Scan Areas with Vegetation: TraceAir offers LiDAR technology to penetrate vegetation, providing accurate data in wooded or overgrown areas where traditional surveying methods may fail. This capability ensures comprehensive land analysis regardless of the terrain.

Streamlined Entitlements and Compliance: The land entitlement process is often complex, time-consuming, and costly, requiring approvals from various agencies. TraceAir streamlines this process with advanced tools for overlaying project plans, taking precise measurements, and facilitating seamless collaboration. These tools help check compliance with SWPPP, utilities, environmental regulations, and other requirements.

Enhanced Planning and Collaboration: TraceAir offers a comprehensive view of the entire property on a single screen, including easy-to-understand, color-coded cut/fill heat maps, 360° panoramas, and collaboration tools. Using these visuals and data from TraceAir in meetings and conversations helps improve planning and coordination, enabling stakeholders to quickly identify and address challenges.

Reduced Risk: TraceAir significantly reduces this risk with precise data and a comprehensive archive of photos and data captured during scans that can be referred back to any time. This allows for quick due diligence, helping identify potential issues early and make informed decisions. Our clients consistently report avoiding issues thanks to TraceAir’s data, ensuring a smoother and more predictable development process.

TraceAir has significantly improved our approach to dirt management. We can easily check elevations, monitor cut/fill progress, track dirt movement, and assess stockpile sizes with a click. TraceAir allows us to fully understand our project, make informed decisions, and ensure accountability.”

— Shaun Hofman, Construction Coordinator, Land Development, Mattamy Homes

Future Prospects and Market Dynamics

The report from Zonda also notes that the total upcoming lots, indicating delivery over the next 12 to 18 months, increased by 0.4% year over year and 16.1% from the prior quarter. This reflects a generally optimistic outlook within the home building industry, as builders continue to seek land to meet potential demand.

“The first quarter saw a higher-than-expected number of total upcoming lots, aligning with the generally optimistic outlook within the home building industry,” says Wolf. “This increase in upcoming lots is crucial for construction activity, and it bodes well for growth in housing starts throughout the rest of the year, assuming consumer demand holds up. Making up 57% nationally, the largest share of total upcoming lots was in the excavation stage in the first quarter.”

Ready for a competitive advantage?

In a landscape marked by significant undersupply of lots and high demand for housing, the ability to make faster, smarter decisions makes all the difference. With TraceAir's solutions, builders are better equipped to meet the challenges of today's housing market and capitalize on future opportunities. Trusted by the top homebuilders across the US and Canada, including all of the top 10 US builders, TraceAir provides the competitive edge needed for success.

‍Schedule a demo today to learn how your projects can benefit.