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