To the casual observer, me, it seems the land market is a bit nuts. Certainly there is a sentiment of scarcity and urgency to buy land right now, as we crest the darkest, coldest snap of the mid-winter market. Looking at the prices of the deals, and doing a quick mathematical exercise, the forecast selling prices of these homes needs to be alarmingly high to make sense. Yet we could face even more rising rates which will harm buyer financing. Despite this, the builders are barging headlong into the murky future, in confidence. I don’t share the confidence, typically overt builder optimism is a topping indicator. Also, land deals aren’t stocks and indicators from that huge, liquid market isn’t the same as developers buying up all the land. More than ever, deep pockets are needed to build With the high land prices and still high construction costs, I don’t see how a builder can finance these spec projects
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