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Arizona Land Sells For 8% Of 2006 Purchase Price

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http://www.midasletter.com/index.php/arizona-land-sells-for-8-of-2006-purchase-price/

Arizona Land Sells for 8% of 2006 Purchase Price

by admin on May 30, 2011

By John Gittelsohn

Bloomberg

May 30, 2011

A 10,200-acre (4,100-hectare) desert site in Arizona sold for $32.5 million this week, five years after a group with investors including the California Public Employees’ Retirement System paid $400 million for the land.

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http://www.midasletter.com/index.php/arizona-land-sells-for-8-of-2006-purchase-price/

Arizona Land Sells for 8% of 2006 Purchase Price

by admin on May 30, 2011

By John Gittelsohn

Bloomberg

May 30, 2011

A 10,200-acre (4,100-hectare) desert site in Arizona sold for $32.5 million this week, five years after a group with investors including the California Public Employees’ Retirement System paid $400 million for the land.

Cool.

I "knew" it, theoretically. But a concrete example like that is always helpful. :)

Question: When and where building plots become worthless?

Answer: When and where building costs alone = house market value.

According to this table linked below building costs seem to be around £100/sq.ft., or £1,100/sq.m.

"Guide to building costs", LINK: http://www.homebuilding.co.uk/files/ascent-homebuilding/Costs%20Feb%2011_Layout%202.pdf

Only in very few parts of the country house prices may be getting down to this level already. But not in good areas, and not here in the south though. Prices around here are usually between £2k and £3k / sq.m. I find hard to believe that prices in good areas around here will ever be this low - £1,000/sq.m.

Nevertheless, I am quite sure building plots will get much cheaper.

But when though? Logically they should have fallen by much more already, but the problem is that many potential sellers still believe these "weak" market is a temporary thing, and are still holding their properties until the market goes "back up to 'normal' "... How long until sellers get it?? How many years? 1, 2, 5?!

Edited by Tired of Waiting

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That still sounds expensive to me. If you think how much farm land costs in the UK versus how much the Arizona desert site quoted has fetched, even after falling 92% in value it still sounds like a bad deal.

Great, you might be able to build houses on it, but who wants to build new houses in Arizona now?

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Cool.

I "knew" it, theoretically. But a concrete example like that is always helpful. :)

At just under $3,200 an acre, it also shows that land has almost no intrinsic value in and of itself. I only has value when you can put something on it or find something under it.

Planning permission effectively creates a lot of value. As planning permission is supposed to be in the public interest, I am not sure why the rewards are private.

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At just under $3,200 an acre, it also shows that land has almost no intrinsic value in and of itself. I only has value when you can put something on it or find something under it.

Planning permission effectively creates a lot of value. As planning permission is supposed to be in the public interest, I am not sure why the rewards are private.

Or grow something on it.

Which I would guess is pretty tricky in Arizona. 3k dollars an acre for sand and rocks sounds quite a lot.

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At just under $3,200 an acre, it also shows that land has almost no intrinsic value in and of itself. I only has value when you can put something on it or find something under it.

Planning permission effectively creates a lot of value. As planning permission is supposed to be in the public interest, I am not sure why the rewards are private.

Good point.

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Or grow something on it.

Which I would guess is pretty tricky in Arizona. 3k dollars an acre for sand and rocks sounds quite a lot.

I did miss out the "grow something" bit.

The level of irrigation in Phoenix has actually changed the climate : they now have a man made micro-climate which is different to the rest of the valley. They are going to have to run out of water at some point : probably well before we run out of oil.

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I did miss out the "grow something" bit.

The level of irrigation in Phoenix has actually changed the climate : they now have a man made micro-climate which is different to the rest of the valley. They are going to have to run out of water at some point : probably well before we run out of oil.

Actually if or when humanity solves its energy problem, water won't be a problem anynore, as we have plenty of sea water to be desalinated.

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“This won’t be developed in my lifetime,” Kleinman, who gave his age as “mid-50s,” said in a telephone interview. “Our plan is basically buy and hold and resell after the market appreciates.”

Need a greater fool.

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Actually if or when humanity solves its energy problem, water won't be a problem anynore, as we have plenty of sea water to be desalinated.

Desalination has always fascinated me.

There are a few questions :

- How many micrometers of the earth's surface salt water will be required per year to meet the fresh water needs of the earth's population in 50 years?

- How many micrometers of hydrocarbons (on a BOE equivalent) will be required to convert a kilolitre of salt water to fresh water in 50 years?

- What is the cost of converting the hydrocarbon requirement to solar or nuclear energy?

- At what rate is "manufactured" fresh water recycled? (Through evaporation, waste water recycling etc)

I don't know the answers to the questions but my instinct is to assume that desalination is the beginning of the "death spiral" for the planet. Many think that the oceans are limitless given their relative size compared to landmasses. I don't.

I have always thought that water will be the limiting factor for the planet (well ahead of hydrocarbons).

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Desalination has always fascinated me.

There are a few questions :

- How many micrometers of the earth's surface salt water will be required per year to meet the fresh water needs of the earth's population in 50 years?

- How many micrometers of hydrocarbons (on a BOE equivalent) will be required to convert a kilolitre of salt water to fresh water in 50 years?

- What is the cost of converting the hydrocarbon requirement to solar or nuclear energy?

- At what rate is "manufactured" fresh water recycled? (Through evaporation, waste water recycling etc)

I don't know the answers to the questions but my instinct is to assume that desalination is the beginning of the "death spiral" for the planet. Many think that the oceans are limitless given their relative size compared to landmasses. I don't.

I have always thought that water will be the limiting factor for the planet (well ahead of hydrocarbons).

But remember both the water and the salt will go back to the sea. Water will just "pass trough" us.

The only problem now is energy. As soon as we bring the cost of solar energy down, problem solved. 10, 20, 30 years? I don't know, but it will probably be soon enough.

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But remember both the water and the salt will go back to the sea. Water will just "pass trough" us.

The only problem now is energy. As soon as we bring the cost of solar energy down, problem solved. 10, 20, 30 years? I don't know, but it will probably be soon enough.

I do wonder about the efficiency of the "pass though" process.

Increased levels of salination, possibly accelerated by the absorption of water into the earth's crust / core rather than recycling through evaporation with the dumping of salt back into the sea does worry me over a very long time horizon.

To my mind, desalination is a much larger, uncontrolled experiment than nuclear power albeit over a shorter time horizon. The former is a 100 year experiment. The latter is a 1,000 year experiment.

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The latter is a 1,000 year experiment.

Over that kind of time scale, if we've sorted out energy enough to carry out desalination on a serious scale, we can just go and get more ice from elsewhere in the solar system if we need it.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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