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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Elroy Jetson who wrote (6126)5/11/2004 12:35:46 PM
From: GraceZ  Read Replies (1) of 116555
 
I think CA has always had far higher land costs to home price than we have here in Maryland (except when you get to waterfront which has always been extremely high in price).

As for not much development, I took a trip around the neighborhood the other weekend and there were about 100 new houses going up within 5 mile radius of my house. If I don't travel down a road for a couple of months, the next time I'm greeted by an entire new town of houses. Land prices were cheap here for a long time, but recently lots which were unsellable have doubled and tripled, but the size of the houses they are building has tripled as well. The size of a 30 year old house around here was maybe 800-1500 square feet on 2-4 acres. Now it is 3500-5000 square feet on an acre with one 15,000 square foot monstrosity that looks more like a neo-classical old age home than a private residence. That thing has at least a million in landscaping. What is funny is that it sets on 25 acres over looking I83, between two split level houses circa 1962 that probably sold for 30k when the current occupants bought them.

BTW, the word is Ryland lost money in Texas despite cheap land. In CA they have consistently not been able to buy enough land to satisfy the demand there. Over the 30 years I've been working for them they have had extended periods where they had zero houses available in CA and times when the official line was they were exiting the CA market altogether (around the time of the last washout there when they lost a bundle on....land!). Most everything they build in CA sells out immediately (of course until it doesn't). I think the anti-growth measures there have kept the marginal supply of new housing below demand for decades except in remote or desert areas where the demand is low anyway.
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