Placerville Real Estate Blog

It’s generally accepted that the impact — perhaps even the intent — of El Dorado County’s Traffic Impact Mitigation Fees was to dramatically slow the development of undeveloped land. I’ve done some research recently that sheds some light onto how much of an impact these fees have had. Based on this research, we will see that the traffic impact fees have had an effect on the slowdown in sales of land that has been every bit as detrimental as the change in the general economy.

Since 2005, real estate sales have slowed in many areas of the country, including El Dorado County and Sacramento County. Unit volume and prices are down, and inventory is up. In the case of undeveloped land in El Dorado County, we currently have 727 units for sale listed in the MLS. Given that over the last year our average unit sales volume has been 23.2%, this works out to a figure of 31.4 months of inventory.  The most common type of bare land available now is the two to five acre parcel (144 units), with parcels between one-half and one acre coming in second (124 units).  The remainder of the 727 units are divided among the other categories, with the fewest in the 20 acre plus category (73 units).

In contrast to the 31.4 acres of land inventory we have in the county, our inventory of homes appears relatively meager at 9.3 months.  However, current inventory is not the only indication we have that land sales have been dramatically slowed through the impact of the traffic mitigation fees.  The changes in unit volume from year to year also give us an indication.  For developed parcels (residential homes of one type or another), 1976 units were sold in the last year, down 23.7% from the year before (2005-2006).  The volume in 2005-2006, in turn, was down 19.0% from the previous year.

We can consider these reductions as a sort of “baseline” for the decrease in volume we’d expect as the general real estate market cooled in the last few years.  In the case of land, however, we can also see how the Traffic Impact Mitigation (TIM) fees factor in.  This year’s unit volume of land sold in El Dorado County, 278 units, was a decrease of 55.7% from the 2005-2006 period (as compared to the 23.7% figure we quoted above for homes).  The year before, 2005-2006, El Dorado County land sales were off by 43.1% from the prior year (2004-2005), as compared to a 19% drop in unit volume for homes during the same period.

As we can see, the slow down in land sales has taken place at roughly double the pace of the slowdown in the sale of homes.  Perhaps in a later article I will take a look at how prices have changed in each category over the period.  I predict that in addition to the TIM fees, there’s a different psychology that’s often at work in the sale of a home versus land, as a result of which we’ll find that the prices of land have tended to retreat more slowly.  But we’ll leave most of that discussion for a future article.