Owners of undeveloped land still have dollar signs in their eyes. But with the housing market cooling, builders aren’t so willing to pay up for buildable lots. That means there could be a huge gap between the price owners are demanding (high) and the price builders are willing to pay (low). When that happens, sales slow dramatically.
The always-interesting John Burns of John Burns Real Estate Consulting in Irvine, Calif., spelled out this argument in a brief analysis today. Check it out.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.