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: Wyätt Gwyön who wrote (21974)	7/6/2004 3:56:33 PM
From: Elroy Jetson	Read Replies (2) of 306849

Scarcity is a slippery concept when used in real estate. There are certainly only four corner-lots at the intersection of Fifth and Maple. But what makes Fifth and Maple the most desirable location in the world? Scarcity is just another way to talk about demand, by proxy. Why is the real estate in downtown Los Angeles not far more costly than similar lots in downtown Manhattan? The weather is certainly far superior in Los Angeles. Both are international port cities which attract a large number of immigrants. The business environment, in terms of taxes, regulation, crime, transportation costs, is far more favorable in Los Angeles than Manhattan, yet in spite of these defects, Manhattan has a much larger business base in terms of assets, revenue and jobs. What is the attraction of a location with so many defects? Is it simply because it's scarce and therefore superior to locations where land is less expensive? Why did people, for a time, pay more per pound for Pet Rocks than they did for candy or steak? Is it because small river rocks offer more enduring value? What gives an undesirable and cheap piece of real estate cache and value? Is it scarcity?

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