Click on the title above or the link below to review a Reuters article on New Home Sales.
Ouch! has been saying for years that all but the most custom of custom homes will stop being built and that from a purely financial perspective land currently has a negative value in many parts of the country.
Look at the math: If I gave you a piece of land for free and all you have to do is pay to build a new home, labor, materials, permits, carrying costs, etc., and let's say that will cost you $200k. In most markets you will be competing against very similar homes (foreclosures, short sales, etc.) which are currently sitting on the market and not selling for $200k OR EVEN LESS. So what is the value of the land???
If you have liability and taxes simply by owning it, and you will incur a loss by building on it and then selling it...how does it not have a negative value? Ouch! has told us for several years that we simply have too many dwelling units in most of the country. If we needed more would new home sales be hitting record lows???
http://finance.yahoo.com/news/New-home-sales-drop-to-record-rb-2868445540.html?x=0&sec=topStories&pos=main&asset=&ccode=
