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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (25882)	12/12/2004 12:44:23 PM
From: John Vosilla	Read Replies (2) \| Respond to of 306849

Right on Jim. Land values in bubble markets are up 5-10 fold just the past 4-5 years. Home values up maybe 50-200% in the same time. Majority of the increase is the land residual. Makes sense when I hear construction costs up not more than 30-40% during the same time frame. In Florida the casino atmosphere with a whole new cottage industry of hunting down owners of vacant underassessed lots to flip to builders is big business today. We had a similar land speculation atmosphere here in 1925-26 period right before the national housing market top and several devastating hurricanes. Anyone who continues building in the bubble markets inevitably is an accident waiting to happen as they will have to continue to pump way overpriced product after breaking ground today with such a high basis in the land and soaring construction cost in potentially a faltering economy with higher interest rates and tighter underwriting standards.