The great land price swing
Lenders and investors beware: Land is a very risky asset

Department of Energy

Article Highlights

  • Land is essential for all types of economic activity - every business has a footprint.

    Tweet This

  • At the height of the 2006 real estate boom, land in the US is estimated to have been worth more than $17 trillion.

    Tweet This

  • Research presented by @AEI’s Stephen Oliner suggests that land is indeed a high-risk investment.

    Tweet This


Land is essential for all types of economic activity. Every business — whether it’s General Motors or the corner grocery store — has a footprint. The same is true for the homes and apartments in which people live.

Land also constitutes a major part of wealth. At the height of the real estate boom in 2006, land in the United States (excluding farmland and land held by the government) is estimated to have been worth more than $17 trillion. This figure represents about 40 percent of the value of commercial real estate and housing in the United States.1 Of course, much of that wealth dissolved over the next few years as real estate markets crashed. The new research presented in this Letter documents the huge swing in land value over the recent cycle, showing that land is indeed a high-risk investment.

Read the full text of the letter here.




Also Visit
AEIdeas Blog The American Magazine
About the Author


Stephen D.
  • Stephen D. Oliner is a resident scholar at the American Enterprise Institute (AEI) and a senior fellow at the University of California, Los Angeles (UCLA) Ziman Center for Real Estate.

    Oliner joined AEI after spending more than 25 years at the Federal Reserve Board. An economist by training, Oliner held a number of high-level positions at the Fed and was closely involved in the Fed's analysis of the US economy and financial markets. Since leaving the Fed, Oliner has become well known for his analysis of US monetary policy and has maintained an active research agenda that focuses on real estate issues and the US economy’s growth potential.  He is coprincipal developer of the AEI Pinto-Oliner Mortgage Risk, Collateral Risk, and Capital Adequacy Indexes.

    Oliner has a Ph.D. and an M.S. in economics from the University of Wisconsin. He received a B.A. in economics from the University of Virginia.

  • Phone: 202.419.5205
  • Assistant Info

    Name: Emily Rapp
    Phone: 202.419.5212

What's new on AEI

image The Census Bureau and Obamacare: Dumb decision? Yes. Conspiracy? No.
image A 'three-state solution' for Middle East peace
image Give the CBO long-range tools
image The coming collapse of India's communists
AEI on Facebook
Events Calendar
  • 14
  • 15
  • 16
  • 17
  • 18
Wednesday, April 16, 2014 | 10:00 a.m. – 11:00 a.m.
Calling treason by its name: A conversation with Liam Fox

Join us at AEI as the Right Honorable Liam Fox sits down with Marc Thiessen to discuss and debate whether America’s intelligence agencies have infringed on the personal privacy of US citizens.

Thursday, April 17, 2014 | 4:00 p.m. – 5:00 p.m.
The curmudgeon's guide to getting ahead

How can young people succeed in workplaces dominated by curmudgeons who are judging their every move? At this AEI book event, bestselling author and social scientist Charles Murray will offer indispensable advice for navigating the workplace, getting ahead, and living a fulfilling life.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.