The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (361)	8/28/2001 11:44:24 AM
From: chomolungma	Read Replies (1) of 306849

No one is magically going to create any more land. No one is magically going to create cheaper land where land is already scarce. So don't expect the prices of new or resale homes to come down that much in the future in heavily populated areas. This is only partially true. There are times when shortages cause prices to rise, but these are location specific and not general. This platitude that "they're not making any more land" is designed to give buyers comfort. In reality there is plenty of land to build on and people are moving away from the metro areas where prices are maxed out. Don't believe that prices can't fall in high-demand areas. The laws of economics aren't repealed in areas like San Jose. Companies won't locate there if they have to pay their workers unrealistically high salaries so they can buy million dollar homes that would be one-fifth that in another location. To do so would place them at a competitive disadvantage. Over time this will depress demand for real estate in even the hottest areas where land is the scarcest.

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