During the past few months, the business press has been reporting that many of the nations largest home builders may have to write down the value of their land holdings given the softening in the housing market.  Many builders have walked away from millions of dollars in option money they had given to land owners in order to control that land.
USA Today is reporting that builders are indeed scaling back the land they have. Land contracts signed in the past couple of years will likely be either renegotiated or the builders will walk away leaving their option money on the table.
For more on the story see here.
Based upon my conversations with some local developers here in Northwest Hennepin County, we’re seeing the same thing as is mentioned in the article. Land owners continue to think their land is worth a premium. However, developers and builders are very cautious about bringing to market more $800,000+ luxury homes. It’s clearly going to take months and months to digest what’s currently on the market.