In the sharpest turn yet for Spring 2025, the land and lot market is flashing yellow — and maybe red — in multiple high-growth housing markets, as builder sentiment adjusts from cautious optimism to tactical defensiveness.

In a candid conversation with John Burns Research and Consulting Senior VP of Research Surveys Jody Kahn, a central figure in the firm’s monthly national builder survey and land market analysis, the real story behind April’s sales stumble and its downstream impacts on land valuation came into focus.

What’s now clear: 2025’s spring selling season has not just underdelivered — it may have upended many strategic assumptions heading into the year.

There’s always been seasonality,” Kahn notes. “But this April marked the first time since 2012, other than the COVID lockdown period, where net sales per community dipped below our long-term benchmark for April. That’s a real shift in momentum.”

Builders, she says, are already recalibrating — scaling back on starts, reevaluating pricing, trimming headcount in some regions, and quietly preparing for impairments on land positions that no longer pencil.

Starts: Downshift Mode

While March marked what now appears to be the peak of Spring sales, April saw a sharp 2.5-point decline. Starts, which typically peak around this time of year, fell by 2.7% month-over-month, signaling hesitation about immediate demand and concerns over swelling finished inventory, particularly in Florida, where standing spec inventory in Jacksonville and Tampa has doubled year-over-year.

Builders are still starting homes, but more surgically.

Builders want inventory so they can remove rate exposure for buyers and match the resale market’s immediacy,” Kahn explains. “But they also want to know their costs before putting a price tag on the home. So they’re speccing further through construction before going to market.”

Pricing: The Softness Spreads

April should be a month of price strength. Instead, only 14% of builders raised net prices, while a growing share continued cutting prices to drive traffic. National pricing is flat year-over-year — far from the 4% gains seen a year ago and light-years from the double-digit surges of the COVID era.

The softness is regionally uneven: the Midwest and Northeast, less oversupplied and less impacted by recent multifamily booms, still see slight year-over-year price gains. But momentum has reversed in Sun Belt markets like Florida, Texas, and the Carolinas. Kahn notes that Raleigh-Durham flipped from year-over-year price appreciation to “meaningful” declines in just two months.

Land Values: Residuals Under Pressure

The impact is evident in the land survey JBREC conducted with brokers in April.

We’re seeing a meaningful pullback in demand,” Kahn says. “Not a collapse— but a real downtick in deal flow.”

Finished lot price appreciation is also stalling, and more builders are trying to sell off land positions at the direction of corporate HQs looking to convert nonperforming assets into cash.

Some builders are now quietly impairing lots, especially in cases where density plans must change due to hazard insurance restrictions.

The insurance situation is forcing developers to pivot from 8-plexes to duplexes,” Kahn says. “That reduces unit count and hurts residual values. In many cases, the pro forma just breaks.”

Hazard Insurance: A Slow-Motion Crisis

Kahn views the hazard insurance crisis as a structural challenge, not just for homeowners, but for land and development capital itself.

We need something like a GSE for hazard insurance,” she says. “Because the private market can’t handle this level of risk, and it’s distorting valuations.”

Builders are discovering that uninsurability isn’t just a closing problem—it’s an entitlement, density, and financing problem. And it’s spreading beyond California and Florida to pockets of Texas, the Southeast, and the Midwest, where disaster frequency is rising.

Builder Strategy: Land Light with Eyes Open

Despite the weakness, Kahn does not see a collapse in builder readiness.

The biggest builders generally have the lots they need for the next three years,” she says. “They’re focused now on being selective, cautious, and realistic about future dealmaking.”

The land light pivot is real — but nuanced.

Where once land banking was used to offload marginal deals, now builders are banking their best, most strategic land positions,” Kahn explains. These deals are more central, better approved, closer to vertical, and still expensive. But they’re viewed as must-haves.”

Buyer Hesitancy: The Demand Problem Builders Can’t Control

Ultimately, what’s throttling the market isn’t just interest rates or resale competition — it’s buyer fear.

People are afraid to sign a 30-year contract right now,” Kahn says. “They worry about their job, the economy, their savings. And if they’re nearing retirement, they’re watching the markets nervously. That’s a demand-limiting force.”

She adds: “Even the traffic that’s out there is different—more often driven by family changes, job relocations, or health concerns, rather than pure discretionary moves. The urgency is just not there.”

Strategic Implications: Prune, Preserve, Prepare

What should builders do? Kahn’s advice is blunt and grounded in data:

This is a time for humility,” she says. “Don’t just run your old models. Get fresh eyes, question assumptions, and be willing to walk away.”

Land portfolios should be triaged: prune what no longer aligns, preserve the strategic core, and prepare—if capital allows—for rare opportunities as distress surfaces.

However, the signal is clear for now: Spring has stalled, and 2025’s second half may be more about survival than acceleration.

Builders are learning the same lessons they did during the Great Recession,” Kahn says. “But this time, the dynamics are different—and the playbook needs to be, too.”