Builders are running (not walking) away from land options right now in a big way. Does that sound like an undersupply situation to you? It surely doesn’t sound like that to me.
What’s irrational is the idea that homes have to be built in large developments.
I agree, homes don’t have to be built in large developments. However, they usually have the biggest profit and the most leeway in terms of negotiating with the sellers, city, county in terms of concessions and services. In terms of desirability, and economies of scale, the large land parcels, those can certainly be considered “undersupplied.”
A lot of times we here in piggington’s fight over definitions (just like me and my wife). While large builders may consider San Diego to be undersupplied in terms of developmentable land, there is more than enough for small businesses and investors. Those builders who do not have any “product” to work in San Diego, they have already closed shop and consolidated their operations out of San Diego (examples? D.R. Horton – they closed their Carlsbad office last year).
