The Race Continues: Economic Growth vs. An Economic Tantrum-Week 15

Land Market Summary By Segment:

Residential Land – Is the Market Building a Bubble #2?

There are market segments with an over-abundance of lots and almost no demand for the ones that exist. But in the most desirable and most active market segments, the reverse is true. This type of self-feeding frenzy usually occurs prior to the creation of a “Bubble”.

In the most active market segments, lot prices are now reaching “nosebleed” levels, another sign that we see when we are approaching a “Bubble”. The question is how rising interest rates will impact the new home market to get the supply and demand back in some sort of balance.

In these uncertain times, it is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land.