[quote=bearishgurl]I don’t see land prices coming down in SD County. Firstly, we are running out of land (if we haven’t already run out). What is left are slivers of exurbs that will surely be encumbered by costly CFD’s, IF they are ever built on.
Secondly, am I missing something here? Why do first-time homebuyers expect to purchase BRAND-NEW construction? Where did this expectation come from? Even 1st time buyers in cheaper counties and states don’t expect to buy new construction. There is PLENTY of resale inventory in SD County on the market for a first-time buyer. A first time buyer with little down has to be able to ACCEPT what is in the resale inventory in their price range, rent or leave the county. It’s that simple.[/quote]
Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.
We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.
There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.
I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.
