Land Swings Home Prices

Peter Coy

Davis
The cost of land is an increasingly important factor in the prices of homes. Not just in a few markets with well-known shortages of open space like San Francisco. Even in Minneapolis, land accounted for almost 46% of the value of homes in 2004, up from just 12.5% in 1984.
Palumbo

That's according to a fascinating new study published by the Federal Reserve. It's by Morris Davis of the University of Wisconsin (top) and Michael Palumbo, a Fed economist, and it was published last month. (You can find it here. I saw it mentioned first in the REAL Trends newsletter.)

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