I wonder if Lennar found a way to hedge all that fresh Orange County land they purchased last month.
What does Lennar face? Well � they will try to sell thousands of overpriced homes in a community were affordability is now in the low teens, were job growth is nil, were speculation has run amuck, and were non-occupancy rates are high. And they have to do this as floating interest rates are bouncing off unprecedented bottoms.
When all is said-and-done, Lennar investors will be the true losers. MARK THESE WORDS; what Lennar did last month will go down as the biggest real estate gaff of the decade.
Yes you are right. Especially with all the new land that is being made cheaply in China. Apparently in OC the supply of land is endless and what the hell once that runs out they can just import more. Nobody !! especially a major HB has ever lost money on buying land. With Lennars deep pockets they can afford to hold major land purchases until the market improves. In Florida they bought land in the boonies years ago and are now reaping huge profits as the suburbs have expanded to their holdings. The OC Land is a long term purchase and I doubt if it was "The biggest real estate gaffe of the decade" But then looking at your previous postings what has a basic understanding of the HB to do with your way of thinking.
I love it when people use that reasoning to justify real estate�s unprecedented run-up. Do you think the lack of land had anything to do with Tokyo�s 70-80% decline in real estate? I�ve been to Tokyo, and unlike Orange County they really do have a lack of land. Or, what about Las Vegas??? It�s the desert and despite a surplus of land, real estate up over 50% last year alone.
Land deficits or surpluses are misused when longs, preach to shorts about real estate. I don�t care how much land or supply exists, or doesn�t exists, if there is enough speculative capital chasing real estate, there�s always going to be a strong demand.
What we have is an asset bubble being driven by extreme liberal liquidation, not lack of supply.
seapoint - hate to tell you this but hythere is right, i live in o.c. and it is a house of cards on the verge of imploding. half of the county's employment seems to be real estate related these days, it's like a self feeding franzy, many of the realtor/homebuilder/mortgage/appraiser employees are the ones playing the game, they all seem to own 2 or 3 homes at the same time! it's all being done on no-down/interest only/arms, the first hiccup in values and they're toast!