Land Swings Home Prices

Peter Coy

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.

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.)

To continue reading this article you must be a Bloomberg Professional Service Subscriber.