We did something similar 3 years ago when we bought our lot. Small neighborhood for our area - fewer than 20 lots sized 2-3 acres each - but it was where we wanted to be eventually and we loved the land so we jumped on it. It has turned out to be a good decision.

When we bought, the neighborhood had been through foreclosure (all of the available lots and common areas) and was just purchased by another local developer. There were 4 houses currently built, two of them under foreclosure themselves, and only one occupied by its owner. The new developer did do some cleanup to the landscaping and got the street lights turned back on, then he started cleaning up the available lots.

We were the first to jump in after he took things over, but once we did, the lots around us started moving. The two lots surrounding us sold within a year (maybe 18mo) of us buying in, and he sold them for more than we paid for ours (and they are all smaller than ours). Plus, we got the best lot in the neighborhood (in our humble opinion). We've had some of the new buyers tell us that they would have much preferred our lot had it been available.

We haven't even built yet, but now have 3 more houses built in the neighborhood, plus one of the foreclosed existing houses has a new owner who is taking good care of it. We plan to build this year, and are SO glad we can focus on the house itself and have the land taken care of. Plus, since the land is paid for it's a large portion of our construction loan down payment.

If your only red flag is the idleness of the neighborhood, I wouldn't let that bother me.

There has been very little construction in our area over the last 6 years-- I don't know that I would worry too much about a neighborhood that didn't do well in that time, unless it was surrounded by neighborhoods that were expanding.

There are two things you've said that would make me less inclined to worry: first the time frame and second the price range of the houses. Recall that 6-7 years ago the great recession started and the housing market tanked in many areas of the country. $1 million home is unaffordable for the vast majority of people.

Having said that, we built our current home in a neighborhood of about 25 lots and were one of the first. At the time there were only 8 or 9 houses and they were not moving fast. For many reasons we fell in love with our 17 acre lot and didn't care. If we planned to stay here for 20 more years, we would have no problems. It's been built out. The issue we will face when we sell is we have the most expensive house. We love it, never planned to move, but as we are almost empty nesters, it's way too big.

We are doing the exact same thing. Small development (64 acres, 24 home sites) was originally marketed during the go-go bubble as $900k++ estate homes. The three original builders/developers lost their collective arse when the bottom fell out. Banks eventually took over 20 of the 24 lots (and are partnered with a "corporate" builder who shall remain nameless), and a terrific local custom builder bought the other four. We are working with him and when we break ground this summer, we'll be just the 5th home. We feel like we found the deal of the century and that our timing was perfect.

Hopefully the tide is changed but what I've seen in our neck of the woods - I really nice area, nice land that was developed in 2006. The builder built his personal home - $1.4 million as the first home. Lennar bought the development when he foreclosed and have built some $500k homes. They are selling very well and the neighborhood is probably finished now.

Another $1M neighborhood developed at the same time is now getting built more in the $700k range.

So - depending on your style, it may be a non issue. For resale, it may be an issue. But if they haven't foreclosed yet, it likely won't and even if it did, the cut in prices would probably be minimal (at least around here but each market is so different).

We had looked at both those neighborhoods and passed because of the time (2009) and my concerns about them being so empty. Confidence is up and in most areas, inventory is down. My builder is starting his first spec home in 5 years.

thanks for the replies. A little more info:

The developer is apparently 'old money' so sitting on these properties isn't much skin off his nose. In fact I called his office expressing interest in the lots and no one ever called me back, this was 2-3 weeks ago. There is signage at the front of the property displaying the lots with an agent to contact. We had to have a builder get us in (because it's gated) to walk lots. We would avoid using the agent so we don't have to pay commission.

The first home initially listed close to a million then sold for somewhere in the upper 700's. I think the homes that will go in there will probably be closer to the 600-700's (including lot). Lots are 120-155K for almost 2 acres and some close to 3 acres. We are told that the developer probably won't discount very much. He doesn't seem to mind sitting on these lots and keeping everything maintained. We are also told the owner of the only home in the neighborhood is friends with the developer which is why they have kept things gated up. No one can just wander in to look at the lots, unlike another nearby neighborhood that was also developed around the same time frame and has yet to have a singe home build. However some of those lots have sold and our prospective builder is going to build one home in that neighborhood. So in general things might look like they are turning around. That builder also told us that he's got two clients walking lots in the same neighborhood we are interested in. So.

what else....no, there are no nearby neighborhoods expanding. There are only 4 neighborhoods in our immediate elementary district that have land left. Two are the ones I mentioned above that have none and one home buildt, the 3rd has much smaller lots and not many of those left although it is quite an upscale neighborhood with homes ranging from probably upper 600's to well over a million. The last neighborhood has a few lots left and is a bigger neighborhood relatively....I would have to guess 30 ish homes? Slightly lower price ranges mostly at the mid 500's to 700's, and just a very few more than that because there's maybe 3 lots there on riverfront property.

I'd check property records to see who owns the empty lots.

Someone might have bought them as an "investment" just before the housing bubble went pop.

Yes i checked on the parcels in the neighborhood. They are owned by the developer.