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I'd love to see you post any actual numbers about this vibrant speculation and active recruiting market on invaluable land.
Admittedly, when a house and city utilities are already connected to a property, things become a little more muddled. However, take this property: https://www.zillow.com/homedetails/8...71490705_zpid/ . It sold for $370,000 and Zillow estimates its value at $450,000. But the amenities just aren’t there. From the photos of the property, none of its appliances or structural elements seem to warrant the price. It’s a triple decker in East Boston. It was likely built with pocket change.
Last edited by Boston Shudra; 07-21-2020 at 08:27 PM..
Admittedly, when a house and city utilities are already connected to a property, things become a little more muddled. However, take this property: https://www.zillow.com/homedetails/8...71490705_zpid/ . It sold for $370,000 and Zillow estimates its value at $450,000. But the amenities just aren’t there. From the photos of the property, none of its appliances or structural elements seem to warrant the price. It’s a triple decker in East Boston. It was likely built with pocket change.
How is any of this about ONE property in Eastie somehow related to your original premise?
Is it scarce? Last time I checked, the US has plenty of undeveloped land.
Of course it is, but first remember it is an economic term.
The phrase scarce here isn't being used to emphasize a Babe Ruth signed baseball is scarce, but a plain baseball at the Sport's Authority isn't.
I'd also be careful on saying land is undeveloped, so it isn't scarce, even when we don't have building on land that doesn't mean we have removed the native natural environment and put the land to use for other purposes.
There is a finite amount of land, in particularly there is an even more a finite amount of land that meets the needs of a producer to be able to make certain goods.
For examples Georgia-Pacific is a paper company that requires a lot of land to produce all the paper products we consume, but they have to find the right amount of land in the right environment, right regulations, and still be able to operate within someone kind of social responsibility for their affects on the natural environment.
They can't merely go out west to a desert were open acreage is 100x less expensive.
So land is often cited as a main scarce resource, because it provides us with the raw materials we need to produce goods. However, we have to control particular pieces of land that let us access or grow those raw materials
The same thing applies to human behaviros, such as corporate locations and housing (and there is a a reciprocal relationship).
Finding the right land to operate your headquarters comes with a requirement to be within a standard commuter-shed of the intellectual talent pool you need to hire from to be able to operate it. You might also need to be in close proximity of clients, suppliers, outside contractors, etc... For some the ability to maximize these needs the options available are limited and this is why see land values rise so high in many of our largest cities that attract intellectual talent, clients, suppliers, needed outside contractors, etc...
Inversely, when someone goes to buy a home the home prices are greatly affected by the person's ability to commute to a job they are trained for, as well as meet the other need and expectations of their families. If your training happens to lead to a high-paying job in in-demand location for the reasons mentioned above, the other highly paid people brought to that community for those jobs leads to an intense supply limitation increasing prices and decreasing lot sizes.
In Short, land is a scarce resource and that is why there is a natural market where the laws of supply and demand are at play affecting the cost of acquiring and/or using the land.
I think what another poster said on the other page might be true: that it’s Greater Fool Theory, but not necessarily a pyramid.
That would be possibly more a more accurate description.
The real question, and this is true of many coastal cities, is whether the selling prices of properties are justified by fundamentals. Given the housing stock, are there enough households with high enough income and/or assets to support the sale prices?
I own Real estate as in one SFH to live in. If it goes up great but am not counting on it doing so. Buying a home to live in is not pyramid scheme. Some buy real estate to rent out. That is not a pyramid scheme either. So what is so unique about us real estate that you see a pyramid scheme? It doesnt work that way in Texas.
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