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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Don Earl who wrote (58854)8/2/2006 12:36:34 PM
From: John VosillaRead Replies (3) of 306849
 
'If the cost goes up, the price goes up. The story is the same for land. The turn key parcels with all utilities are gone. The cost to develop raw land is high. The cost goes up, the price goes up.'

There are so many factors in this mix. A lot depends on the area. Shacks on 60 foot lots in LA for $700k or new condos in Miami at $450 psf aren't supported by cost nor the modest cash flow these assets generate. The speculative mania boosted land values 10-20 fold in some areas since 2001. Biggest bubble we'll ever see in our lifetimes IMHO.

Then you have exhurbs in markets with very strong population and job growth like Houston or Dallas where you can buy a brand new 3500 sf home with all the infrastructure in place for $170k. That is where there will be the support for the rising costs you are referring to.
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