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.
Oliner

What's new on AEI

Holder will regret his refusal to obey the Constitution
image 'Flood Wall Street' climate protesters take aim at their corporate allies
image 3 opportunities for better US-India defense ties
image Is Nicolás Maduro Latin America's new man at the United Nations?
AEI on Facebook
Events Calendar
  • 29
    MON
  • 30
    TUE
  • 01
    WED
  • 02
    THU
  • 03
    FRI
Thursday, October 02, 2014 | 9:00 a.m. – 10:30 a.m.
Campbell Brown talks teacher tenure

We welcome you to join us as Brown shares her perspective on the role of the courts in seeking educational justice and advocating for continued reform.

Friday, October 03, 2014 | 12:00 p.m. – 1:00 p.m.
Harnessing the power of markets to tackle global poverty: A conversation with Jacqueline Novogratz

AEI welcomes you to this Philanthropic Freedom Project event, in which Novogratz will describe her work investing in early-stage enterprises, what she has learned at the helm of Acumen, and the role entrepreneurship can play in the fight against global poverty.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.