IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v14n11997p1-18.html
   My bibliography  Save this article

Residential Land Prices Prior to Development

Author

Abstract

This paper tests various hypotheses related to expectations and the value of undeveloped land. Evidence is found to support the hypothesis by Capozza and Helsley (1989) that the price of land in rapidly growing cities reflects a significant premium based upon expectations about future growth. There is also evidence that this premium varies from less than 40% of land value during down times to over 70% during boom times. Additional hypotheses tested related to development expectations for smaller geographic areas within the market. Land values reflect forecasts of employment up to five or six years into the future for nine square mile planning areas. The level of residential development activity from two to three miles around individual parcels is also capitalized into value. Much of the value of urban land may be explained by the growth rate of the metropolitan area and micro-geographic factors related to individual parcels.

Suggested Citation

  • Karl Guntermann, 1997. "Residential Land Prices Prior to Development," Journal of Real Estate Research, American Real Estate Society, vol. 14(1), pages 1-18.
  • Handle: RePEc:jre:issued:v:14:n:1:1997:p:1-18
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol14n01/v14p001.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Capozza, Dennis R. & Helsley, Robert W., 1989. "The fundamentals of land prices and urban growth," Journal of Urban Economics, Elsevier, vol. 26(3), pages 295-306, November.
    2. Arnott, Richard J & Lewis, Frank D, 1979. "The Transition of Land to Urban Use," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 161-169, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hans R. Isakson & Mark D. Ecker, 2001. "An Analysis of the Influence of Location in the Market for Undeveloped Urban Fringe Land," Land Economics, University of Wisconsin Press, vol. 77(1), pages 30-41.
    2. Elias Oikarinen, 2009. "Dynamic linkages between housing and lot prices: Empirical evidence from Helsinki," Discussion Papers 53, Aboa Centre for Economics.
    3. Jeanty, Pierre Wilner & Kraybill, David S. & Libby, Lawrence W. & Sohngen, Brent, 2002. "Effects Of Local Development Pressure On Land Prices: A Spatial Economic Approach," 2002 Annual meeting, July 28-31, Long Beach, CA 19767, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Luis H.R. Alvarez & Jukka Lempa & Elias Oikarinen, 2009. "Do Standard Real Option Models Overestimate the Required Rate of Return of Real Estate Investment Opportunities?," Discussion Papers 52, Aboa Centre for Economics.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:14:n:1:1997:p:1-18. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster). General contact details of provider: http://www.aresnet.org/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.