| The fact that the price of real estate is constantly on | | | | In the San Francisco Bay Area, demand for new |
| the rise is not really a surprise to anyone, is it? After all, | | | | houses has sent land prices skyrocketing as high as |
| everyone knows that they stopped making land a long | | | | 100% over the past four years. Builders are scrambling |
| time ago. In elementary school, we learned about the | | | | for parcels. One such parcel of ground, just 4.7 acres |
| famous Law of Supply and Demand. As the supply | | | | close to the freeway in Del Mar, California, was |
| shrinks, the demand always increases. Because the | | | | recently offered at the stunning price of $6.7 Million!!! |
| supply has been getting smaller and smaller, since the | | | | There are a few times, however, when land prices |
| dawn of time, it makes perfect sense that the demand | | | | tend to stay flat, or even decline. Southern California in |
| has been increasing significantly. | | | | the early '80s is a good example. During times of |
| As a rule of thumb, the price of real estate doubles | | | | severe, and I do mean severe economic slumps, real |
| every 10 years. So if you buy land today, for $10,000, | | | | estate values have a tendency to stay flat. When the |
| it’ll be worth about $20,000 | | | | economy recovers, and buyers, builders and investors |
| ten years from now. Again, this is a rule of thumb, but | | | | begin purchasing again, the prices quickly increase. |
| historically it has proven to be accurate. | | | | Inflation is another key to the rising cost of real estate. |
| One of the major reasons for the rising cost of real | | | | Remember how a loaf of bread used to cost less |
| estate is the growth of our world population. Take | | | | than fifty cents? Now it's $1.99 or so. The same is true |
| Phoenix, Arizona, for example. In 1940, the population | | | | in real estate. The same dollar today just won't buy as |
| was a small 186,000. By 1994, the population had | | | | much property as it did yesterday. Inflation, especially |
| reached over 1.5 Million. Las Vegas, Nevada, is another | | | | when combined with rising wages, has created an |
| fast-growing area. Today, the population is nearly 1.1 | | | | environment in our real estate markets where the |
| Million, up from just 460,000 twenty years ago. Yes, | | | | value of the dollar is diminished versus our buying |
| the population more than doubled in twenty years! | | | | power in times gone by. |
| You don't have to look very far to see the effects of | | | | Remember the Law of Supply and Demand and |
| rising land prices. How many times have you talked to | | | | inflation, and remember that they quit making land a |
| an old timer who said to you "Twenty years ago, I had | | | | long, long time ago. |
| the chance to buy that place for only $32,000. And | | | | With land Auctions, you get the chance to name the |
| they just sold it for $250,000." These aren't rare | | | | price you're willing to pay for the land you want to buy. |
| circumstances. They are normal, common, everyday | | | | There are some incredible bargains that people walk |
| events. | | | | away with at land auctions. |