Wed, 5 Dec 2012, 11:03am PST
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Companies with land to sell to developers often make land available in booms and not available in busts. Examples are the Irvine Company and Newhall Land and Farming. In their developments one sees many production builders who buy the land shortly before building.
By properly tracking the markets these land companies can extract the maximum value for their land over the long term.
In areas where the land is not held in strong hands, there is more volatility.
However in today's market the bust has lasted so long that builders are at risk of drinking their own Kool-Aid.
The 'boomers' are seeking to downsize or relocate to lower cost areas and their buyers are much poorer.
How long can a boom driven by a lack of inventory last? I have no clue as all asset markets are now manipulated.